Fears and Frustration About Money for Entrepreneurs

Money is deeply personal, yet most entrepreneurs struggle with fears and frustrations around finances. Beyond the numbers, our relationship with money traces back to childhood lessons and societal conditioning that no longer serve us as independent business owners.?

This week I sat down with Harriet Formby. She specializes in supporting entrepreneurs processing money trauma through fractional CFO services and consulting. Since we recorded our conversation for the Big Brave Business podcast, I’ve been thinking a lot about some of the themes we discussed.

Facing My Own Deep-Seated Myths About Money

A surprise about entrepreneurship is that it brings up all of the assumptions, insecurities, and mindsets we established as early as childhood. The stories we have told ourselves for years, even subconsciously, all seem to bubble up to the surface at one point or another during an entrepreneurship journey.?

Personally, my relationship with money has been particularly interesting to explore in entrepreneurship. Before becoming an entrepreneur, I had so many assumptions about money that I didn’t really spend much time considering, because those assumptions just seemed true. Those assumptions included a lot of scarcity: one thing I knew for sure about money when I worked a day job was that there was absolutely not enough of it. I also hoped, and believed, that if I worked hard enough and was talented enough and would just get noticed by the right people, eventually I would work my way up to a position where I might have enough money in the future. And, if I could get really lucky, maybe there would even be more than enough money some day.

Pretty quickly after university, I became really cynical. I started developing an ‘us’ vs ‘them’ mindset about those of us who don’t have any money and those in leadership who hoard it and hurt others to keep it. What’s been really interesting in entrepreneurship is that even though that mindset has evolved, I look back on it and still think, “Well, that’s not wrong.”

A major aspect that has evolved for me is that entrepreneurship has always felt, from the very beginning, like an opportunity to be a Great Equalizer. I may not be one of “them” just yet, but unlike corporate day jobs, being a service provider is a method of work that grows based directly on the effort you put into it. If I am willing to work hard and work a lot, it is guaranteed that I can make a lot of money. That is absolutely not true in a day job. You can work hard your entire life and barely make ends meet. In fact, the hardest-working laborers in the world are those living in poverty. Meanwhile, the wealthiest in the world write and promote schools of thinking about “four-hour workweeks” (which are based on outsourcing labor to poorer folks who will work many hours for a tiny fraction of the total earnings of the companies they help run).?

At the same time, becoming an entrepreneurial service provider does not solve money scarcity. Although I make significantly more money than I’ve ever made in my life prior to starting my business, I still find myself spending the money I make. It is certainly true that the cost of living has increased significantly in the past decade, especially since Covid quarantine days. My rent today costs (literally) 4 times what I was paying in 2017. It is still impossible for me to qualify for a mortgage that would afford anything worth buying in my part of town, because the average real estate price has increased faster than my earnings have.?

I don’t say this because I have a cross to bear. I am one of the lucky ones. Every single month since I went into business for myself, my bills have been paid in full. Every year I’ve been in business, my revenue has increased. But despite my increased earnings, I still feel like I “can’t” get ahead - and although there are some social factors that definitely need to be taken into consideration for a fair trial, the reality is: a lot of this comes back to my relationship with money.

I share my story because on this page, and in this podcast, I think honest vulnerability is helpful. It would be easy to share my financial wins and stay focused on the LinkedIn-Colored-Glasses building a social resume. But the reality is that, even if your assumptions and the stories you’re carrying with you in your relationship with money are different from mine, you have your own, too. We all do. And as entrepreneurs, they all come bubbling up to make you face them.

Entrepreneurship and Risk

A strange but fantastic sensation as an entrepreneur is not just the hope and realization that entrepreneurship is a potential “Great Equalizer” as I mentioned earlier, but also how much more control you have over your money. After all, I left my last day job 5 years ago because my position was eliminated after a long string of layoffs. A 9-5 is supposed to be “secure.” But it wasn’t.

I grew up in a household with a serial entrepreneur father. He is the type of man who sees entrepreneurial opportunities everywhere. And he has the confidence and self-assurance of all mediocre white men (I say this with love, Dad) that he truly believes he can be successful at any number of these opportunities. Meanwhile, my mother is a sensible, responsible, calculated-risk woman. My entire childhood, she actually balanced her physical checkbook regularly and in my entire life, I’ve never known her to fall into bed with her makeup on rather than taking the time to do a nighttime routine. Needless to say, they are no longer married to each other.

I established an understanding during my upbringing that entrepreneurship is, obviously, really challenging, totally unpredictable, and frankly irresponsible. I never considered it an option for my career path as I entered adulthood.?

So imagine my surprise, 5 years into full-time entrepreneurship, when what I’ve learned from my own experience is the exact opposite of what I believed to be true. I thought I was making all the responsible choices: I double majored in college with a full scholarship, I got a job right out of school even though it wasn’t what I really wanted to be doing, and I worked hard every day at every job I had. And not only did I struggle to be “seen” or recognized for my effort and ahem sheer talent, but I also struggled to make ends meet. Eventually, just before the winter holidays, with three kids at home and a partner in grad school, my job disappeared in a poof of smoke.?

I switched tactics, and instead of being ‘responsible,’ I let myself take a ‘really big risk,’ and I started a business. I went all in because I didn’t have a day job anymore and my family really needed the money. And to my surprise, this job has been easier than working a day job 100% of the time. I work fewer hours, give less labor, sleep better, stress less, and make more money. I love the people I work with, do work I actually (mostly) enjoy, and get to be creative and innovative every day. It’s my favorite thing to think about, talk about, and spend time doing. And I make more money. And when something goes wrong? People I work with are understanding and empathetic. When a client turns over? I still have 25 others and a pipeline of prospective clients to take their place.

When someone decided not to pay me anymore 5 years ago, I was worried about putting presents under the tree, and ultimately in a worst-case scenario, wondered if I’d be able to keep a roof over my kids’ heads.?

When someone decides not to pay me anymore now, I can still pay every single one of my bills.

So it turns out that my experience with entrepreneurship is actually less risky than a 9-5…??

Financial Responsibility as an Entrepreneur

More control over your money also means more responsibility over your money. Now, not only do I have to be responsible for my personal expenses, but I also have to be responsible for my business expenses.

There is so much more to pay for. Learning and developmental opportunities to invest in. Technology, hardware, and software. Subscriptions for services I didn’t even know existed, but now I need or eagerly want to run or expand my business. Constant opportunities to grow and evolve. And most stressfully, team members to pay. It is both fulfilling and terrifying to be responsible for someone else’s financial security.?

Knowing what to invest in, and when, and in what way, feels complicated and overwhelming for many entrepreneurs. These are things you don’t have to think about in a day job. My guest this week, Harriet, insists this is one of the biggest pain points she helps her clients work through.?

The Relationship Between Creativity and Money

One thing that really interests me about our conversation this week on Big Brave Business is the relationship between creativity and money.?

My assumption, and a story I’ve been carrying in my relationship with money, is that people who have more money, and more resources in general, must have a greater advantage when it comes to being creative. After all, those living in scarcity - especially to the point of desperation - must not have the same opportunities to be creative and innovative. Wouldn’t it be easier to be innovative with more, especially unlimited, resources? To me, it seems that creativity is a privilege.

But Harriet brought up the idea that artists and creatives are often not the wealthiest people in society. In fact, there is a huge social assumption that artists and creatives reject wealth. First of all, the idea of left-brained and right-brained people insinuates that creatives must be bad with numbers and organization. Creatives, therefore, must be disorganized and bad at managing money. Many creatives probably even believe this about themselves, because that’s what they were told as early as childhood. Secondly, of course, we all know and see that society does not value art financially. We, as a society, do not want to pay for art and continuously devalue and underpay creatives.?

Hence, the starving artist trope.

And really, aren’t people who lack wealth forced to be creative about saving and spending? Aren’t people without wealth forced to innovate ways to create a semblance of comfortable living??

For those of us who don’t consider ourselves ‘good with money,’ or ‘having money,’ what if we could tap into this creativity connection to empower ourselves about our financial responsibilities? What if instead of guilt and shame around money, we could find excitement in the opportunity to be creative in managing our money? When I let myself think about my money as an opportunity to be creative, I can feel a shift in my nervous system. Is it possible that I could learn to be excited about managing my money, because I can associate it with an opportunity to create art??

What Now? Tips for Managing Your Relationship With Money as an Entrepreneur

I asked Harriet for tips and best practices for entrepreneurs managing their relationship with money. After all, even if your assumptions and money stories look really different from mine, you have them just the same.

Harriet suggested journaling or otherwise reflecting. First, consider what your assumptions actually are about money. If you enjoy journaling, spend some time writing out all of the assumptions about money you can think of. What do you know about money? Write it all out.

Next, review these assumptions about money and consider where they came from. Why do you think each of those assumptions is true? Where is the origin of that assumption? And most importantly, is that an assumption you want to continue to carry with you into your future relationship with money?

To listen to our conversation on Big Brave Business, you can find the podcast anywhere you like listening to podcasts. Find your favorite platform at bigbravebusinesspodcast.com .

Want to connect with Harriet? You can learn more about her services and resources at https://www.belowthelinefinance.co.uk