Is there such a thing as a cashflow mindset?

Short answer: YES.

And it could be impacting your business's cash and your wealth.

Yep. I just said that. In my practice as a fractional CFO, I was always baffled why smart, hardworking business owners kept hitting the same financial "wall" of running out of cash. Naturally, things happen that are outside of the control of the business owner. Like a pandemic. Like double-digit inflation.

Most of the business owners I spoke to kept having cashflow issues despite good sales revenue.

So what is going on?

I believe it comes down to our cash flow mindset.

Identifying cash flow mindset issues involves examining how your thoughts, beliefs, and habits influence your financial management. Here are some steps and questions you can use to identify potential mindset issues related to cash flow:

?1. ???Self-Reflection and Awareness??

?? - ???Assess Your Beliefs About Money:?? ?Ask yourself what you believe about money and cash flow. Do you see cash flow as something you can control, or do you feel it's largely out of your hands? Do you operate from a place of scarcity, always worried about having enough, or do you believe in the possibility of abundance?

?? - ???Identify Emotional Reactions to Financial Decisions:?? ?Consider how you feel when making financial decisions. Are you stressed or anxious? Do you avoid looking at your bank balance or financial reports? These emotions can signal deeper mindset issues.

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?2. ???Look for Patterns in Your Financial Behavior??

?? - ???Procrastination:?? ?Do you delay financial tasks like invoicing, following up on late payments, or reviewing your finances? Procrastination often stems from discomfort or fear related to finances.

?? - ???Undervaluing Services:?? ?Are you hesitant to charge what your services are truly worth? This could indicate a lack of confidence in your value, leading to cash flow problems because your revenue isn't covering your expenses.

?? - ???Avoidance of Financial Data:?? ?Do you avoid reviewing your financial statements or addressing cash flow issues head-on? This can be a sign that you're uncomfortable with or afraid of your financial situation.

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??3. ???Examine Your Financial Decision-Making Process??

?? - ???Reactive vs. Proactive:?? ?Are you making financial decisions reactively—only addressing issues when they become urgent? Or are you proactive, planning ahead to manage cash flow effectively?

?? - ???Focus on Short-Term vs. Long-Term:?? ?Do you focus more on short-term fixes rather than long-term solutions? A short-term focus can create ongoing cash flow issues as underlying problems are never fully addressed.

?? - ???Fear-Based Decisions:?? ?Are your financial decisions driven by fear (e.g., fear of not having enough, fear of losing clients) rather than confidence and strategy? This can lead to risk-averse behavior that stifles growth.

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??4. ???Evaluate Your Business Practices??

?? - ???Inconsistent Pricing or Payment Terms:?? ?Do you frequently change your pricing or payment terms, especially in response to cash flow pressures? This inconsistency can indicate a mindset issue where you’re undervaluing your services or overly concerned about client reactions.

?? - ???Reluctance to Invest:?? ?Are you hesitant to invest in your business, even when it’s necessary for growth, because of cash flow fears? This reluctance might stem from a scarcity mindset that limits your business’s potential.

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??5. ???Seek External Feedback??

?? - ???Consult with a Financial Advisor or fractional CFO (shameless plug):?? ?Sometimes, an external perspective can help you identify mindset issues that you might not see yourself. A financial advisor or coach can help you recognize patterns and beliefs that are holding you back.

?? - ???Talk to Peers or Mentors:?? ?Discuss your cash flow management with trusted peers or mentors. They might notice behaviors or attitudes that suggest a mindset issue.

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?6. ???Mindset Shifts to Consider??

?? - ???From Scarcity to Abundance:?? ?Shift your focus from what you lack to what you can create. This shift encourages proactive financial management and opens up opportunities for growth.

?? - ???From Avoidance to Engagement:?? ?Commit to regularly reviewing your financials and facing challenges directly. The more you engage with your finances, the more control you’ll gain over your cash flow.

?? - ???From Undervaluing to Recognizing Value:?? ?Understand the true worth of your services and price them accordingly. This shift helps ensure your revenue supports healthy cash flow.

?Identifying cash flow mindset issues is a critical step in improving your business’s financial health. By reflecting on your beliefs, examining your behaviors, and seeking external insights, you can uncover and address the mindset challenges that may be impacting your cash flow.

You business depends on it.

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My name is Diana Miret.? As a Christian fractional CFO, I provide financial counsel to businesses earning between $1M and $10M to increase profitability, optimize cash flow management and heighten financial confidence and clarity. You can find me at www.dianamiret.com