Entrepreneurs need to develop many different skills, from communication and leadership to business management and sales. When it comes to maximising profits and attracting investors, financial know-how is a must; that’s where your money mindset comes in. You can learn all the practical aspects like budgeting, bookkeeping, invoicing, and investing, but growth will be a constant challenge if you have a negative money mindset.
A money mindset refers to people’s core beliefs around money, tending toward either scarcity or abundance. Abundant thinking tells you that there is enough success available for everyone; likewise, you can afford what you need to achieve your share. However, those with a scarcity mentality see everything through a limiting lens, believing that we must compete to win and that the next financial pitfall is always around the corner. These attitudes shape your financial confidence and can prevent you from achieving your goals.
Like many core beliefs, the money mindset is a product of your past experiences and is strongly linked to your emotions. How you feel about money stems from things like how your parents handled their finances when you were growing up, if money was discussed openly in your household, and any stressful events that might have changed your financial situation over the years. It affects what you think you can and can’t achieve with money, how much you think you deserve, and how you manage your finances.
Many aspects of your business will be impacted by your relationship with money, including:
- Deciding when to launch
- Exploring new possibilities
- Fixing your rates or pricing your products
- Closing sales
- Willingness to borrow
- Handling debt
- Paying your staff and suppliers
- Chasing outstanding invoices
If we start by looking at establishing your business, a scarcity mindset will paralyse you in a place of fear, erode your confidence and cloud your judgement as you focus on all the things that could go wrong. It will take you far longer to leap in the first place, and you will be less likely to take advantage of future opportunities. Further down the road, if you’re concerned that there’s too much competition and not enough work to go around, you might keep prices low in a bid to attract customers, creating problems like undervaluing what you offer and minimising your profit margin.
On the other hand, entrepreneurs with an abundance mindset will be able to outsource areas of the business where they need help or hire people whose contribution they consider a worthwhile investment. They will also be confident pitching to potential customers because they trust in the value of their product or service. Another essential aspect to think about is what it’s like to work for a leader with a scarcity mentality. If you’re building a team, you want to create a positive, proactive environment where team members are encouraged to grow, not one that feels pessimistic or restrained.
It’s important to know that a money mindset isn’t all or nothing, it’s normal to be somewhere in the middle. And neither is it set in stone. Like other skills that you consciously try to master, you can develop your money mindset to increase your chances of success, making entrepreneurship a far more rewarding journey. Change starts by having the self-awareness to understand where your attitudes stem from and then be able to put the right steps in place to forge a new path.
- Get clear on the goals – revisit your business plan to remind yourself what you’re working towards and why. This will make it easier to see any actions you need to take. Would you benefit from applying for a business loan? Or looking for investment? Think about what feelings taking these actions evoke. Is your inaction coming from a place of fear?
- Recognise your achievements – being grateful for what you already have, celebrating good financial decisions and acknowledging your achievements are very important. It will help you to build confidence in your abilities and believe that greater accomplishments are possible.
- Change the self-talk – if you regularly tell yourself that you’re bad with money or that you’ll never reach the next milestone, try reframing the internal dialogue. If you’ve made poor decisions in the past, look at what they’ve taught you, rather than undermining your potential by being self-critical.
- Find a mentor – one of the best ways to establish new habits is to find someone with a positive mindset whose business advice you trust. If you’re risk adverse, they will be a good sounding board to get perspective and seeing their progress will encourage you to strive higher.
About the author
Aliya is a UAE-based personal and professional development coach who helps people develop the range of skills they need to maximise their potential. After studying Biomedical Science and then completing a Master’s in Public Health in the UK, Aliya quickly climbed the corporate career ladder. But it wasn’t long before she realised that the boxes she was ticking didn’t offer the fulfilment or sense of achievement she hoped.
Aliya undertook her life coaching and NLP accreditations while remaining in her job, before making the move into coaching full-time. She initially focused on working with professional women in London, attracting a strong following at her workshops and group coaching sessions. Aliya moved to the UAE in 2018 and launched her development masterclasses. She built a strong client base among Emirati and expat women who wanted to address some of the barriers holding them back in the workplace.
Aliya is now one of the leading coaches in the UAE, working with male and female clients, including CEOs, public figures, celebrities, professors, lawyers, and healthcare professionals. She has conducted training sessions for ADNOC, the Ministry of Education, the Emirates Foundation, and First Abu Dhabi Bank. On The Women Who Flourish podcast, Aliya shares proven strategies to help people stop standing in their own way, overcome their fears, and make their dreams a reality.