As a small business owner, money is likely always on your mind (whether you work alone or with a small group of employees). Are you thinking about ways to earn more, save more or get out of debt? Are you just getting comfortable with how you feel about money in general? As a somewhat-new business owner, ensuring that I was in the right mindset about money was a priority. I interviewed Jessica Eley, a money mindset coach, to learn about the best ways for independent business owners to embrace how we think and feel about finances.
What Type of Money Mindset Issues Do Most New Small Business Owners or Freelancers Face?
Eley: “Most small business owners, especially those who come from corporate backgrounds, are wired to think that they’ll get paid to ‘show up’ (because this is what they do at a regular job — they come, do their job, and leave). They think that putting up a website, creating some goods or services and establishing a local or social media presence will make money appear, when in fact, the only thing that makes money move is sales.”
“Unfortunately, many people have encountered or hear about numerous negative experiences. They don’t want to be ‘pushy’ or lack confidence in themselves or their services. As a small business owner, your first job is to be a salesperson. Without that skill, you really just have a hobby that brings in inconsistent income at best.”
Why Do so Many Solopreneurs Feel Uncomfortable Talking About Money With Potential Clients?
Eley: “Any time someone tells me they’re uncomfortable talking about money with clients, my first question is always, ‘How comfortable are you with talking about your own money?’ This doesn’t mean that you have to publicly air your finances, but do you open all your bills? Do you seek the guidance of accountants, advisers and other financial professionals? Do you know how much money you have in the bank at any given time? If you’re not comfortable with your own money, you won’t be comfortable asking someone else about theirs.”
“Beyond that, it’s essential to understand that you are not your business (even if you’re a freelancer or personal brand). When you are playing the role of salesperson for your business, that is who you are — a salesperson, doing a job and filling a role within a company (which just so happens to also be yours). Do your research, understand your customers’ needs and values, get the training that you need to sell strategically, and then do your job!”
What Advice Would You Give to New Business People Considering Charging Less Money so They Receive Positive Testimonials in Return?
Eley: “Typically, getting testimonials is more beneficial for building your own confidence than actually selling more in the future. If charging less for a few ideal clients gets you over the hump of feeling like a newbie, do it. But decide in advance what your full price will be in the future, and how many clients you’re willing to take at the lower rate (no more than three).”
“Make it clear to your customers up front that they are expected to give you feedback that you can possibly use for your marketing in exchange for the lower rate. Often, the ‘special rate’ ends up becoming the set rate, which is why it’s essential to have these decisions and boundaries set up initially so that you don’t convince yourself to keep undercharging.”
How Should Solopreneurs Begin Charging Based on Value Instead of Time?
Eley: “Every sales transaction is two parties agreeing on the value of something. When you exchange money for time, you’re putting the emphasis on how long it takes to do something, rather than its intrinsic value. The only way around this is to understand the value of your products or services to your buyers and charge based on the results, benefits or status afforded. Those results are what you are selling to your customers, because it communicates the value of whatever your business does or makes in a way that they care about. When you begin to understand who really values your skills and services and why, then you will see your work as an investment that a potential client can make to get a return they’ll be happy with.”
How Can Solopreneurs Push Past the Boundaries of Our Mindsets to Grow Our Businesses?
Eley: “Question all of your assumptions (ideally, you’d work with a coach, consultant or other mentor to help with this because it’s difficult to even recognize your assumptions. You may believe they’re ‘facts’). Pay attention to what you think is impossible or a barrier to success, and then write down 20 ways to work around the issue, even if they’re not feasible for you right this minute. This conditions you to see possibilities and options — and create a strong network of role models who are a step or two ahead so that you have constant examples of what is possible.”