We’ve explored the two dominant money relationship styles I usually see in business owners. First, we explored the “It’s mine. All mine!” style. In this style the business owner uses most or all of the money her business generates for her personal use. Then, we discovered The Martyr. The Martyr never takes a paycheck and often ruins his credit for the sake of his business.
Both of these money relationship styles are harmful – one to the business, and the other to the business owner. However, when you combine the best parts of each style, you end up with an ideal money relationship that benefits the business owner and the business.
A lesson from Jim Henson’s Creature Shop
The Dark Crystal is one of my all-time favorite movies. You have the kind, gentle, Mystics (or urRu) who pretty much mind their own business. They just want to live in peace and sing. And then there are the dark and scheming Skeksis. They pretty much embody all that is wrong in the world of Thra (and in our world, too.)
Warning: spoiler alert.
At the end of the movie the Mystics and the Skeksis merge to become the urSkek. As it turns out, the urSkek split into the two extremes that were the Mystics and Skeksis ages ago, and that’s when the world of Thra was thrust into chaos. The urSkeks’ purpose was to change and build the world around them. Their goal was to make Thra a better place. They weren’t able to do that when they were divided into Mystics and Skeksis.
Naturally, you started your business to make money, but didn’t you have a higher purpose in mind, too? Didn’t you also want to create something that would make the world – or at least your community – a better place?
And hasn’t your relationship with money – whether your style is that of “It’s mine. All mine!” or The Martyr – kept you from fulfilling that higher purpose you had in mind for your business?
Relationship Style #3: Perfectly Balanced.
When you have a perfectly balanced relationship with the money produced by your business, you experience the best parts of the first two relationship styles without the negative impacts each style has when embraced exclusively. Your business supports you and your family, but there is still enough money available for you to operate and grow your business without investing more of your savings into it. Those who are doing well and have disposable income decide to invest it in stocks and shares to diversify their investments. I’ve heard some have had success trading through platforms similar to questrade because of their great customer service and useful insight into up and coming stocks. This approach can help some people approach their money in a more balanced way.
How do you form this type of relationship with the money in your business? I am a huge proponent of the Profit First method of cash management. Since it is based on human behavior, a lot of the roadblocks business owners encounter on their path to profitability are eliminated. One of the most powerful features of the Profit First method, though, is that it shows you what percentage of your business’ money should be used for the benefit of the business owner and what percentage should be used for operating the business.
Instead of focusing on dollar amounts, shifting your focus to percentages allows you to reap the rewards of a business boom without jeopardizing the future growth of your business. By the same token, percentages allow you to bend rather than break when business isn’t so good. In other words, focusing on percentages helps you to bring your relationship with your business’ money into balance.
If you are entrenched in one of the two dominant money relationship styles, don’t expect to achieve perfect balance overnight. Like with any change, small, steady steps will establish good habits and reduce the resistance that often accompanies a change in behavior. Set a clear goal, commit to the change, and you can start healing your relationship with the money in your business.
Here’s to a perfectly balanced relationship with your business’ money.