April has two national holidays I want to talk about — stress awareness and financial literacy. I find this such an oxymoron that these two themes happen in the same month because finances cause stress — especially if you’re a business owner. 

We just finished the 2023 tax season here in the US. How did you do? How many sleepless nights did you have? “They” say that when you write a nice fat check to the IRS, it’s a sign that you made money. Okay, great, but it still doesn’t stop the sting of seeing that hard-earned money fly out of your account.

To ease the stress around money — we need to first understand it.

I teach financial literacy — the ability to understand and effectively use various financial skills. Financial literacy isn’t something we learned in high school (yet). And especially if you’re a Boomer or Gen-X’er, no one ever talked about the practical side of money. If you did talk about money, you were likely shushed — it was a taboo topic and still is for a lot of people. I’m changing that.

There’s a lot of information online about finances and money. Having worked in the financial industry for almost 40 years, I know much of it has changed. And yet, in some ways, much has stayed the same. The key is to weed through the noise and find the parts that apply to YOU and your business.

First up in this article, we’ll cover financial literacy. Then, we’ll talk about how stress comes up around business and money. 

What does financial literacy mean to you?

First, take a look at what just happened with your taxes. 

• Did you owe money for last year? And could you pay it all at once?
• Could you make your estimated tax payment?
• Did you need to file an extension?
• Did you have to rob Peter to pay Paul (aka the Government)? 

If the most recent tax season showed you where you have some gaps in your financial literacy, let’s rip off the band-aid and take a deeper look at where the money is going. 

7 Steps to Assess Where Your Money Is Going & Create a Cash Flow Plan.

Set aside at least an hour to sit down and take an honest look at your business finances. I know this topic can bring up some icky feelings for some entrepreneurs. If that’s the case for you, make sure you have a cup of your favorite coffee or tea, light a candle, and approach this exercise with a calm and grounded mind.

Step 1 – Print out your P&L.

This should be handy since you just used this to file your taxes. Get your pen out and go line by line with your expenses. Make the following markings: 

• “P” for expenses that generate a profit in your business. 
• “R” for required expenses but could be replaced by a less expensive alternative. 
• “U” for unnecessary for delivering your services or products. 

Every expense item should have a letter beside it. Even small things like your Spotify subscription and verified check on Twitter.

Step 2 – Add up all your business expenses for the year and divide by 12. 

This will give you an idea of how much money goes out each month. Make sure to exclude any tax payments and owner distributions or salaries. 

Step 3 – Breathe. 

Yes, I’m making this an entire step. This is where the stress could be creeping in. Get up, move around, get grounded by going outside, and take three long, slow, and deep breaths. Pay attention to what emotions are coming up for you. If you’re getting that sick feeling in your stomach, it’s okay! Just know there’s no one to blame, and this is part of the journey of being a business owner. You will get through this.

Step 4 – Start pulling off the band-aid. 

Start with the “U” expenses. If you look at the expenses deemed “unnecessary,” you may need some outside help with this step if you’re thinking, “But I need this expense!” You don’t. Really. Usually, the unnecessary expenses are emotionally driven. They give you that dopamine hit but also drain your account. You may need to recruit outside help if you’re struggling with this. A non-biased lifeline can cut through that emotional tie to it. 

Step 5 – Review your required expenses. 

For the expenses you marked with an “R,” are there suitable replacements or alternatives you could use? Are you paying for a premium subscription but only need the free version? Do you have a CRM system you’re paying for but could easily set up a spreadsheet that will perform the same thing? 

Step 6 – Review your profit-generating expenses. 

Look over the expenses marked with a “P.” See if they’re still generating a profit for you and will continue to generate a profit in the next year. Also, think of profit, not just ROI (return on investment), but in time. Could you hire a virtual assistant (VA) to take some of the repetitive tasks off your plate so you can focus on your own zone of genius? You may not see the immediate return on your investment in hiring a new team member, but you can’t put a price tag on time. 

Step 7 – Review your total expenses.

Take a look at your total business expenses. Did you deduct enough? Did you overspend on online courses or make some last-minute December purchases making the excuse that you were making a business expense? I love the approach that the book Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine by Mike Michalowicz uses, as it’s effective and easy to do — especially with my own money mindset exercises thrown in.

Identifying the Stress That Keeps Business Owners Awake at Night.

As business owners, we deal with stress a lot! You know that 3:00 a.m. wake-up call from your brain asking all sorts of random questions — should I hire a VA? Do I really want to take on that client? Will this investment pay off? Do I need to buy that copywriting course?

On and on, the brain spins like one of those old toy tops I grew up with with the string that you couldn’t resist pulling over and over again.

6 Steps To Manage Stress as an Entrepreneur.

So just like the practical steps we applied to the cash flow, here are six steps to start eliminating stress in your business.

Step 1 – Identify the stressors.

First, let’s identify your primary stressors. Is it time management, managing people, systems breaking down, doing a lot of busy work, working with the wrong kinds of clients, or too much on your to-do list? Are you having fun yet? Write these down so you can see them. List your top five, and start there. Once you’ve completed that, move on to Step 2.

Step 2 – Breathe! 

Just like Step 3 above in your cash flow, but let’s get specific. I like to practice the 4-7-8 breathing method. Close your mouth and quietly inhale through your nose to a mental count of four. Hold your breath for a count of seven. Exhale through your mouth, making a whoosh sound for a count of eight. Repeat the process three more times for a total of four breath cycles. 

This 4-7-8 breathing technique can also make a difference if you struggle with anxiety. I like to practice this several times daily, especially when jumping on a Zoom call or when my cat throws up on the carpet —  whichever comes first!

Step 3 – Start your stress strategy plan.

Now that your nervous system is calmer, you can make better decisions. Make three columns on a piece of paper. Looking at your list of stressors, in the first column, add the stressors of things that only you can do. In the second column, list the stressors you can delegate. In the third column, list the stressors you can eliminate or change.

Step 4 – Review your stress strategy plan for tasks only you can do. 

Circle or highlight the items you enjoy doing in green. Circle or highlight those you don’t enjoy in pink or red. For the duties you don’t enjoy, consider if there’s a different way of doing it. Can you achieve the same goal if you stop doing it? Or maybe you can do these things at a different time of day to ease the pain a little. 

Spend some time here and if nothing is coming up, take a break, get out in nature, go for a walk, or move on to a different business task. Make sure you come back to this. This section is crucial because if you’re circling multiple things that you dislike doing and aren’t enjoying your work. It may be time to re-evaluate your big why. This is where having a coach or a mentor can be a tremendous help!

Step 5 – Finish the other two columns. 

In the next column of stressors you could delegate, assess if you need to hire someone, or seek more knowledge on systems to streamline your business. Since you completed the cash flow assessment above, you’ll be able to know what dollars are available to hire some help. If not, review the cash flow again and see where additional tweaks may do the trick.

Step 6 – Eliminate draining tasks. 

Let’s have some fun slashing tasks in the last column. Is there a client dragging you down, but you’re keeping them around due to feelings of fear or scarcity of not having enough? Do you dread meeting with them? Are certain clients constantly blowing up your phone? If you’re praying to the client gods that you secretly want them to quit — it’s time to move on.

Picture this. These tasks or draining clients are no longer on your schedule, and you can feel the stress melt away. Trust that you will attract another client because you start showing up differently, not just in your business but in all areas of your life. When you release whatever it is in your last column, you’ll feel free and motivated and will look forward to what’s coming next!

When to revisit your cash flow and stress strategy plan.

I recommend you review both your cash flow and stress strategy plan at the end of each quarter. This should help you keep an eye on recurring patterns that are popping up. And, if they keep reappearing, it may be time for some outside help.

Do you need support with your cash flow and stress strategy plan?

Get in touch!