I was talking to one of my mentors about psychology and how when we focus…
Is Fear Impacting Your Cash Flow?
Cash flow requires logical thinking, right? But fear is an emotion, so how are the two related?
Let me tell you a story.
Some years ago, when my business was going through a really rough patch. And I mean really rough. The kind where you accept staff resignations knowing that you won’t replace them and when you have to let staff go in the lead up to Christmas.
There’s not enough money to pay the rent, let alone the wages and all the other bills. The hardest part was having to let go a new staff member who was doing a great job and had only worked for me for six months.
You see, sometimes, circumstances in business can change really quickly, and this was one of those situations.
I cut costs to the bare minimum and worked super long hours to make up for the lack of staff and to make as much of the money as I could from my own labour that didn’t cost more for the extra hours. I’d gone from a team of eight to me, one staff member and a part-time administration person.
Then the next thing I did was I buried my head in the sand and hoped that the cash flow problem would go away, that it would fix itself without my intervention.
From someone who loved numbers, I turned into the person who avoided the numbers.
I didn’t dare look at my bank account, and I didn’t take calls from suppliers, and I didn’t maintain my accounting records very well.
Fear had taken its grip on me, and I was paralysed by it.
I didn’t even chase up outstanding invoices for payment from clients as I was afraid they’d see through me and realise that my business was in serious financial trouble.
I continued to bury my head in the sand for three months, and then it got to the point where I realised that what I was doing wasn’t working and that I needed to change to get a better result, that I needed to face my fears head on and apply logic to the situation.
And so, I sat down and brought my accounting records up-to-date and took a good hard look at the situation. The funny thing was, as soon as I had the full picture in front of me, even though it wasn’t pretty, it took a certain amount of stress off my shoulders. I could see what I needed to do to turn around the situation and was able to put in place a plan to do so.
I remember this situation in the lead up to Christmas every year because that was when the wheels truly fell off my business and I know from the clients I’ve worked with that this is the most stressful time of the year for business owners with costs continuing on without the income to cover them.
Fear drives us to act differently.
Logic told me I should be looking at the numbers, but fear of what they would tell me made me ignore them.
If you’re facing cash flow challenges, the best thing you can do is acknowledge that you’re fearful of what they say and then apply your logical mind to looking at them and seeking a solution.
Like all fears, when we face them, we’re able to overcome them. Don’t let your fears impact your cash flow.
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