For years mentors, coaches and advisors have talked about the impact a business owner’s mindset can have on their business. This is not just flaky ‘woo woo’.
Let me explain.
By Michael Mekhitarian
Clients come to the team at ATB Partners for our financial literacy skills. And that’s fair enough. As business advisors, tax agents and financial planners, we consider it’s a crucial part of our role to educate clients as our working relationship develops. We aim to build clients’ knowledge and confidence because it helps their businesses to grow.
And, as their businesses grow, typically, their relationship with us grows too. It’s win-win.
But my point is this — lack of financial literacy is not something that necessarily holds businesses owners back. After all, one of the world’s most famous entrepreneurs, Richard Branson, has freely admitted that for many years he didn’t know the difference between the concepts ‘net profit’ and ‘gross profit’.
It certainly didn’t impede his business growth… because Branson has a ‘success’ mindset too. He’s prepared to step out of his comfort zone and try new things. So much so that during his early years, global accounting firm Deloitte turned him away as a client because his business model was deemed ‘too risky.’
Another thing that also sets Branson apart is that he’s not ‘afraid’ of money. Meaning, he’s not afraid to lose it.
I’m not suggesting for one second that everyone should simply take a cavalier approach to money, but a healthy approach, a healthy mindset, is a must. Because, as the old saying goes, “you have to spend money to make money.”
Business owners need to be able to identify sound opportunities and be prepared to invest in their businesses, because the returns are not always immediate and they’re not always financial. Returns could come in the form of more free time, more interesting work, gaining a foothold in a new market … the list goes on.
A lot of entrepreneurs start their businesses on the smell of an oily rag. And in the early years, as you’re getting established, frugality is important. But there comes a time to let this limited thinking go, because it stunts your long-term growth.
A poverty or ‘scarcity’ mindset creates a lot of stress, overthinking and avoidance which is caused by focusing too much on what your competitors are doing, instead of what your business is doing. Over time this can kill a small business.
This kind of thinking and activity also makes the entrepreneurial journey difficult too. It ends up being unsatisfying and stifling because it results in someone doing everything they can to ‘protect’ their business, instead of everything they can to open it to opportunities which will enable it to flourish.
An entrepreneur with an ‘abundance’ mindset, on the other hand, will see more opportunities than threats in the landscape, and will actively seek solutions to problems instead of finding more and more obstacles.
Well, here’s a question to ask yourself. Let’s say you did a full analysis of your business and identified half a dozen clients or customers who were loyal, who paid on time, and yet were not particularly profitable.
Would you let them go so that you could free up resources to invest in attracting new, more profitable ones?
There’s no single answer or even a correct answer to this question. It’s just an interesting scenario to pose to yourself. Take time pondering how you’d deal with it. And be really honest with your answers because they will help you understand whether you are scarcity driven, or open to abundance.
Entrepreneurs with ‘abundance’ mindsets are not fearful of change. They embrace it. And they know they can’t always plan for it, so they develop skills and resilience (in themselves and their teams) that will enable them to adapt, no matter what the circumstances or outcome.
Those with abundance mindsets stop viewing their competitors as mortal enemies too, and remain open to opportunities to collaborate –to win clients, or to invest in their industry, or to grow market share together so they all benefit from a bigger slice of the pie.
Entrepreneurs with abundant mindsets also know that there is always more to learn, and they are confident about what they bring to the business and work intelligently. They surround themselves with people who have skills they, themselves may be lacking in.
Most importantly of all, they understand that risks are inherent in all business activity. Success or failure lies in the ones you consider taking, and how you approach them.
If we can help you consider ways to grow your business, contact us, at any time.