How to make more money and beat your money worries
Let's be real... building an early-stage business brings all manner of money worries. Here are four approaches to help you quell those doubts and ultimately, make more of it.
Money feels like the elephant in the room when it comes to discussing early-stage business building. It’s often regarded as taboo to discuss money openly since it’s a sensitive topic for many — one that brings feelings of shame, fear of being seen as privileged if you have it or embarrassment if you don’t.
I have come to realise that talking about money (and helping people to earn more of it) is a core part of my job description. As a coach for startup founders, I am privy to a lot of intricate conversations about money during client sessions and (in case you missed it) The Ask just ran a global virtual summit teaching people how to turn their talent into money attracting over 1,000 people.
Overcoming your own money-related questions and concerns is integral to your ability to build a successful business. Such questions come with both practical and emotional aspects.
Founders not only have to contend with the same money worries as everyone else; putting a roof over their heads and food on the table, but they must also find the money to build their business. Software, systems, a team, marketing… these are just a few of the expenses a founder could incur whilst building a business and in the early days, it is unlikely they are receiving much, or any, income, to pay for them.
So founders have to contend with this unique financial situation practically and work on the emotional components of it too: building the belief that monetary sacrifices are worthwhile and should eventually pay off.
This post will address some of the practical and emotional aspects of this situation. But spoiler alert… I am not convinced that fears and money anxieties will ever fully leave you when it comes to business building. That’s just one of the trade-offs that come with the life of uncertainty entrepreneurs choose (in order to receive the other benefits such as freedom, fulfilment and achieving their professional potential).
However — if you work on developing some core skills and traits described in this both you can both maximise your income and minimise the anxieties surrounding it.
P.S. — Hello to our new readers! You can expect coaching-style posts every other Wednesday to guide you through the early stages of your entrepreneurial journey.
Just hit unsubscribe if that’s not what you need right now.
First a disclaimer: I am not a financial advisor. Please, do your own research and consult a professional when it comes to your financial decisions.
Get to know your numbers
With knowledge comes power. The power to increase the flow of money into your life — we hope.
Whether you’re running a business or not, you need to deeply understand your financial situation at any given moment, and to do so, you can answer these questions to get started:
What are your income streams — what are the different forms of money into your accounts
What is your net worth — ie the total sum of your assets minus liabilities
How are your assets allocated — what % of your net worth is allocated towards which asset, such as cash/stocks/property
What is your financial runway — meaning how many months/years you could survive on your assets if you stopped earning, including those which you can convert to cash in case of emergency
If the details of these feel cumbersome or overkill then welcome to running a business (!) there will be much more of this to come yet. Avoiding these answers can leave you in sticky situations in the long run. If you have less savings it doesn’t necessarily mean you shouldn’t build a business. You should just have a back up plan. Plus, the less you have the less you stand to lose.
These figures allow you to understand how much money you have available to use. They give you context upon which to make the decisions that will ultimately grow your money over time (thank you, compound interest). Answers bring clarity around your financial situation and I know that clarity precedes confidence. Who doesn’t want to feel more confident with money?
Next, consider your money goals.
Take into account your aspirations for the kind of lifestyle you hope to lead, and any big expenses you anticipate having such as family, houses, travel etc. This doesn’t need to be super detailed but should give you a gauge as to the kind of effort required for you to reach such goals. Set a net worth figure for 1, 5 and 10 years out. This is more helpful than an income goal since remember, founders don’t keep all the money they make.
Most people will do such an exercise and realise the gulf between where they are and where they want to be and feel that level of fear rise — wondering where or how this money will materialise from? It is normal to have such concerns and be sure you aren’t putting figures for vanity’s sake but the figures that will make you actually happy.
Ramit Sethi the finance guru says that we should build our own version of a ‘Rich Life’, which is doing and having what makes us feel rich. This means ‘spending extravagantly on the things you love, and cutting costs mercilessly on the things you don't.'
You get to choose what your money goes towards to make you feel like you have enough and many things in life won’t be important to you that might be to other people.
My hope for you, dear reader, is that building a business that provides you with freedom, creates impact and fulfils you professionally, will give you the feeling of a rich life. Regardless of whether you can afford a 5* holiday or designer handbag.
I am not knocking down such desires, but I am here to nudge you into defining what a rich life really means to you; not social media.
Be prepared to spend money to make money
Starting a business can set you back financially, at least short term. Unless you have a bank of funds available to access, the reality in my experience of almost all the founders I work with (myself included) is that they put their own money into building their businesses.
Money perhaps from another job or from short-term contracts/freelance work. These are what’s called trading active income aka your time but with the intention that you are building towards passive income streams and building assets within your business — whether its the IP, the software, the products or service you create it should be something that generates income not directly tied to the number of hours you work. If your business is entirely dependent on the hours you work then you are a freelancer/gig worker which is a slightly different set of circumstances.
But if you want a business that will one day work for you then you can expect to invest startup costs in getting it up and running. Whether that is acquiring skills to lead your business, buying materials or equipment or paying for a coach/mentor who can help you grow into the role of someone capable of running such a business. You are essentially investing in yourself at this point as your business hasn’t got much to show for it — but you are saying to yourself that you are an asset worth betting this money on.
I invested about £12k in year one alone (paid for by freelance work I took on at the same time). I wrote here about how my investments were a force multiplier towards creating a brighter future for me at a time I was at a professional low in 2019. Clients of mine have done similarly and what has united us in such decisions was the knowledge that we were investing in a future we wanted to create and one we believed we were capable of achieving.
Next step once you’ve grasped your financial reality is making a plan to improve it and make more of that moolah.
Have a plan to make more money
Writing this out I had Donna Summer’s song in my head ‘She Works Hard for the Money’ which is to say that I clearly think money is tied to working hard.
This is not the same narrative that all coaches share — often preaching that money should come with ‘ease and flow into your life otherwise you’re not manifesting the right energy’ or some BS. My experience? The harder I work the more money I make. Whether that was at my waitressing job as a teenager, putting in long shifts as a fresh graduate to get a bigger bonus and now as a business owner. Typically output equals input.
However — working hard brings reward only if you are also working smart.
Working smart involves having a plan, which, in the world of early-stage entrepreneurship with its many unknowns, can prove a challenge. But allow me to offer some planning essentials for your business.
A business model that explains both how you will create your product/service e.g design and build it as well as how you will distribute it to customers e.g customer research, selling and marketing.
I often coach people through the process of choosing their business model since it’s so tied to aligning upon their own strengths and interests. Eg. a recent client changed direction from a retreats-heavy business model due to the operational components — preferring to work with ideas than logistics. Try my framework for designing a business model that works for you.Sensible pricing of your products and services. Ensuring that whatever your business produces will eventually bring more money in than what it costs you to produce. In the world of services, it is always preferable to offer monthly packages over hourly rates, for example. Product costs must be cheaper than your sales price once they reach volume. Consider how to engage customers who have already bought from you and increase their lifetime value.
A spending plan for where you will spend to make more money. For example, what expenditures can help you to see that return on investment? Is it materials, up-skilling, coaching, or marketing? Know which levers you can pull to grow your business.
Once you have a plan you must execute on it, but crucially and the point I really want to emphasise is that you must stick with it. If you can double down on your plan and give it a long enough timeline to work out then you’ll eventually build momentum and see the results of your labour.
I see so many people second-guessing themselves or wasting energy dreaming about all of the other potential ways they could be making money (whilst simultaneously not making enough from the way they are currently trying.)
Dreaming is easy and when you are your own boss it is normal to get excited by fresh ideas and how you could approach them. But beware of when this is simply shiny object syndrome distracting you from doing the hard work of focusing on your own path. Showing up each day to do the same thing as the day before is not always fun, but it’s through focus and commitment to your craft that gains will be found.
This leads me to my next point and the final piece of this puzzle — which is the mindset it takes to ‘stay in the game’ long enough to do this work.
Believe that you can make more money
There is a reason that many lottery winners lose all their winnings within a year or so. That’s because managing money is a skill, but so is making money. The meta-skill of actually generating income is one that entrepreneurs learn and get better at the longer they are in business.
As Nathan Barry put it, too in this thread on money:
When you are starting out your track record is limited here — hence why many aspiring entrepreneurs struggle with the concept of investing in their business as they lack the proof that the money will return itself eventually.
But when you’ve made your own money you know that you are able to make more of it. You start to realise that if your current product or service doesn’t work out exactly as you’d like it to, that you’ll be okay. You’ll be okay because you’ve developed the skillset and the mindset to adapt and build something else.
Some keys to a strong mindset when it comes to making your own money?
Adopt an open mindset vs a fixed one. See challenges as opportunities, failures as chances to learn, and feedback as a gift. Become a growth-orientated learning machine and read Mindset by Carol Dweck if this is a new concept to you.
Make decisions based on hope rather than fear. Most of our money worries are based on fears. We should absolutely address our fears and know our numbers (part 1) but when it comes to believing in your ability to make more money it is more helpful to make decisions based on what you hope will happen rather than what you are trying to avoid.
Build the muscle of faith and resilience. Have a sense of trust that it will work out. Yes, there will be hard months (or even years) and you may not wish to withstand such challenges. But if earning your own money is more important than the certainty of a steady pay check, then you will want to develop a sense of faith in yourself and your business. Faith that the money will eventually come if you keep showing up and doing the work.
Know and address your money scripts. Answer these questions with your instinctive reaction and understand better what your beliefs around money are so that you can address any that are less helpful to you:
money is… when i think about money I feel… as a child I noticed that money was… a mistake i’ve made with money is…
Time for some real talk.
This month I’ve spent so much more money than usual in both my life and my business.
There have been really high outgoings involved in running The Talent to Money summit, as well as in moving to Chicago for the summer (an expensive city I am realising) as well as the impact of taking ten days off work. You don’t get paid days off when you work for yourself!
I won’t pretend that there hasn’t been some financial anxiety in the process, added to which, is the fact that my investment portfolio has dropped in value — the same as most of us are experiencing in this economic downturn.
However, I do not feel too worried about money largely because of the fact that I made these decisions based on the life and career I want to have. I wanted to put my business on the map and increase its brand exposure by running a free summit, even though it came at a cost to us, I believe it will pay back in other ways.
I wanted to invest in the adventure of moving abroad short term and living a life with fewer regrets during a time I could do (without a partner or children back home). There was a voice inside of me saying ‘go’ that I listened to and I wrote about this choice to travel here if you are curious or watch a little video from last week.
The main reason I am not more worried however is due to my plan around money and the belief that I can make more of it.
Today is The Ask’s second birthday (yay) and I have had enough experience now of seeing that despite times of uncertainty, that if you put in the work, then the money is there to be found. My skillsets of coaching and creating content come with a plan, business model and a mindset that I can rely on. If things change… I’ll try a different approach.
These things I tell you not to brag, but to let you know that they are also possible for you, too.
There are no guarantees here but there is life-giving freedom to be found when you exchange your steady paycheck for a life of less certainty but more fulfilment.
This life is not for everyone and it brings its fair share of downsides (a post for another day perhaps?) so maybe it’s not for you and that’s ok too. But if you feel that calling then I really encourage you to work through your knowledge, plan and belief around money.
In the meantime, I wanted to say thank you for reading. This newsletter has been my creative playground, my pride and joy. If you ever have feedback I would love to flex my growth mindset and hear it ;)
Until next time…
Ellen Donnelly, Founder + Chief Coach, The Ask
I help ambitious, entrepreneurial professionals decide and plan their next career pivot or business idea so they can feel clear and excited about their future. Apply for coaching.