OUTLINE
0:00 - 0:51: Introduction by Erin Davis on the importance of addressing financial uncertainty in business.
0:51 - 7:51: Discussion of the first hidden cost - the ripple effect of financial stress on personal relationships, physical health, and mental health.
7:51 - 12:53: Exploration of the second hidden cost - decision paralysis and missed opportunities due to financial uncertainty.
12:53 - 15:48: Examination of the third hidden cost - the confidence gap and its impact on business performance.
15:48 - 19:48: Explanation of the fourth hidden cost - the time tax of financial uncertainty and its effect on productivity.
19:48 - 23:00: Discussion of the fifth hidden cost - breaking the feast-or-famine cycle through planning and financial consciousness.
THE ERIN DAVIS SHOW
Welcome to another episode of The Erin Davis show, I want to talk about today the hidden costs of financial uncertainty in your business. I think that we underestimate just how significant financial uncertainty is in our business and the impact that it has.
It's easy to sweep under the carpet and ignore the financial uncertainty aspect and not really acknowledge that it's there. But I think when you do acknowledge it, it provides that release and relief that you know what's happening in your business. So I thought we would go through those hidden costs of financial uncertainty, because when you become aware of what those costs are, you're then able to do something about it. There are five things that I think are really quite significant hidden costs that we tend to overlook in our business. We tend to put our business aside, and try to keep it separate. But as we know, as women were not great at separating things, most women have everything connected. And it's very hard to leave your business at your business or work at work and home at home. If you're anything like me, I need to remember to get the milk, I've got to book the appointments for the kids, I've got to pick up the stuff for dinner on the way home, all while managing clients and managing staff and managing things that are going on in my workday. So it's really easy to overlook these uncertain aspects of financial things in your business and just sort of carry on. But I think when you really stop and look and acknowledge just how much they're impacting yourself, you'll see that they actually impact your business, and then they transfer across into your personal life.
So the first one that I had is actually that ripple effect of the financial stress. Now it impacts our personal relationships, it impacts our physical health, it impacts our mental health and our mental consequences. And these will circle back to impact our business. So when you have financial stress, the cost of that on your relationships is that, you know, you're tired and cranky, and short tempered, you're emotional and unable to see the reason because everything is just so emotional. And we know as women that our emotions tend to take front and centre stage with a lot of us and to be in that financial uncertainty, and having that weight carried on your shoulders. Because you know, as women, we tend to carry everything for the family. So it's not just the business, it's the home life as well. You know, we then can't have good conversations were short and sharp and cranky, like I said, and it just really is that you're not able to engage in those relationships on a deeper level like you would like to, even though you may think that you are it's easy to be distracted and it's easy to be somewhere else instead of being present with those people that you're with. So the impact on our physical health is, you know, there's lots of talk about stress on the body, and how that shows up as illness, pains, you know, we don't sleep well. And when you're not sleeping well, everything is hard. You know that sleep deprivation is awful. And lying awake at night, not being able to sleep because you're worried about the financial uncertainty, uncertainty of your business, then creates a snowball effect that you wake up tired, like you haven't slept all night, it then clouds your judgement, you're tired and unable to think clearly, it really then just starts to impact your whole world. So financial uncertainty can create that anxiety, it can create depression, it can create other mental health problems and have other mental health consequences that we transfer from our business into our everyday life. So really addressing that financial uncertainty within your business will result in better relationships, you will feel better within yourself that lightness you will feel will be amazing, you'll sleep better, you'll have less illness, you will want to exercise more, you want to eat better. And we know that when you start to do these things, they compound, right? They go from, we just do this habit, we just create this thing. And then we do, we just keep going because we feel good. But it also impacts the other way too. If we don't feel good, we then start to sleep less and eat junk food, which then makes us feel crappy. And we would prefer to sit on the lounge, in our PJs eating chocolate watching TV, rather than exercising and moving our body. So that impacts everything on our physical sense that, you know, I suppose it's hard to comprehend. But the financial uncertainty in your business is not just left at the door of your business, you bring it home with you, and it impacts everything around you.
So the second one is decision paralysis and missed opportunities. So when you have financial uncertainty in your business, you are really hesitating to make crucial decisions. You know, you're weighing up whether it's the right thing or the wrong thing, can you afford it? Can you not afford it? What's the impact on the profitability of the business? What's the gross profit margin? Can we really afford to do this? So when you have that financial uncertainty, you're missing out on growth opportunities. And I would say that there's a lot of fear around those decisions and those missed opportunities. And it's about the fear of whether we should do it or shouldn't do it. It's also then about struggling with planning for the long term, and setting goals. Because when you are uncertain about the financial stability of the business, whether that's through economic times are hard, you know, customers are not paying, which means then you can't pay your suppliers or you can't pay your employees, or you can't draw a wage, which is quite common for business owners, it really means you are going to struggle with setting those long term plans and goals.
So when you have that clarity around your financial situation, making those decisions and that planning is so much easier, it means you can then invest in your business and invest in your personal development too. Because as we know that the more that you work on yourself without going ridiculous because there needs to be a time where you actually stop and implement what you've learned. But it's about being able to make decisions without that hanging over your head. Can I afford it? Should I do it? I don't know if I can do it. I don't know if I have any money to do this. You know, what's the return on investment going to be? They are all questions around that financial uncertainty which impact your decision making ability and the opportunities you know your ability to jump and we know as business owners that we need to be able to be agile and adjust and fluid and make decisions sometimes on the fly because otherwise you know you are going to miss out on those opportunities. So that's the second part Cost of financial uncertainty, which is that decision paralysis and missed opportunities.
The third one is a confidence gap. Now, when you have financial uncertainty in your business, you know, you could be undervaluing your products and services, which then you hesitate to market yourself and market your business, because you have that lack of belief in yourself and that confidence about what it is that you sell. And if you are coming from a place of desperation, and financial uncertainty, and that you have to sell and you have to make these sales, there's a different energy attached to that, rather than just showing up and being able to serve your business or serve your customers. So when you hesitate, in the marketing, and you're self promotion, again, you're missing out on opportunities, and that decision paralysis comes in it also, the confidence gap can lead to difficulty in negotiating with your clients and your partners. You know, you need to be able to be so confident and passionate in your business and your products and services that you have to offer. And wholeheartedly believe that you have something valuable to be able to offer the world, that you need to be able to have that strong sense of self, and confidence within yourself to be able to go and fight for what it is that you are selling. And you need to be remunerated appropriately, it's important that you see your value. And if you have financial uncertainty around your worth, and what it is that you have to offer, then the imposter syndrome and the self doubt will be overruling, and your business won't be performing at its best, it will impact your bottom line profitability.
Because you're not charging your worth. And everything that we have to sell is a commodity for somebody else. It's about finding those right people who need what you have to offer. And so if you lack that confidence within yourself, it is going to create financial uncertainty in your business because you're going to be coming from that place of desperation. And rather than coming from a place of service, and how can I be of service to others, you're coming from that place of Well, I have to sell because I have to make these payments, or I have these bills coming up that I have to that I have to pay. So if you have a confidence level in your business that matches that beautiful gift and service that you have to offer your customers and your clients, there isn't going to be around that financial uncertainty around what it is that you have to offer, you'll have that impostor syndrome in check, you'll have the self doubt under control, and you will just be able to show up as your best self.
So I think that we sometimes forget that our confidence is really a cost of financial uncertainty. And when you have confidence, remember, confidence is the ability to take action, the mindset is that we can do it, we know that we can do it. But confidence is believing in yourself and making yourself available taking the action to make things happen. So if you have a gap in your confidence, it is going to impact the financial certainty of your business.
So the next one, number four is the time tax of financial uncertainty. So what does that mean? It means constantly worrying about financial certainty within your business will lead to a reduction in productivity. Now, I don't know about you, but if I’m worrying about something, I sit and think about all the alternatives. I question, is this a good thing or a bad thing? Should I do it? Should I not do it? And it takes time away and focus from actually getting in and getting stuff done.
So when you have financial uncertainty in your business, it is going to lead to worrying about how you're going to pay the bills where things are going to come from, which then leads to a reduction in productivity. What would be better? A better use of your time is to shore up that Financial certainty, take the action, which actually leads to additional income in your business additional profitability. Because remember, sales are different to profits. So we want to focus on profit, what our profit building activities are. And we can spend time, instead of being a financial firefighter, which is a very reactive approach and dealing with things. As a matter of urgency and in a crisis, we're putting out spot fires all the time. We can actually start to strategically plan what it is that we need to do in our business and how we need to show up. So the time tax is really the cost of that time of you taking yourself away from focusing on your business, it leads to procrastination on financial tasks, it leads to insufficient resources, because you haven't planned properly. And it's very much putting out those fires all the time rather than being strategic.
So I know for me that I need to be, I need to have a plan. And when I have a plan, I just need to stick to it. It's sometimes easier said than done, because it's easy to be distracted. However, when I remove the financial uncertainty, and I know I have the confidence within myself to just follow the plan, it takes away the worrying, I don't need to think about things, I just need to follow the plan. And so when you are doing that, you are not reactive, you are not just putting out fires, you're not just dealing with the urgent things as they come up, which of course happens from time to time, but you're actually being very strategic. And so when you remove that financial uncertainty from your business, you can make sure that you have sufficient resources, you can allocate appropriate time to doing your financial tasks.
I know a lot of people in business, particularly those creatives, those entrepreneurial people, they love what they do. But dealing with the book work and the accounting side of a business is really quite challenging for them. So they procrastinate. And then when they do that, they don't then spend the time doing what it is that they need to do. When you don't do the financial tasks, your files are not reconciled, which means then you can't run reports, which means then you don't have the information, you need to be able to make decisions. So there's a real time tax of that financial uncertainty, which then leads to more procrastination.
So if you were able to remove that financial uncertainty from your business, and blocked timeout to be able to get those tasks done, even if they're painful, and even if you find them challenging, it is going to remove that uncertainty for you. So that you can then step into the space of being able to make the decisions and feel lighter within yourself and sleep better and have less illness and be able to exercise and eat better. Can you say that it's all impacting everything, and it's all connected. I know I've said that quite a few times in the past that everything is connected. But it really is. And I think when we start to look at money, mindset and confidence as three things that are all interlinked with each other, it just makes business feel smoother and more connected and more in flow.
And then the last hidden cost of financial uncertainty in your business is breaking that feast or famine cycle. And we all know that when we're in business, there is a roller coaster of income coming in, and bills and money going out. So the inconsistent cash flow and the impact of that on the sustainability of your business is a really quite strong, hidden cost. That causes a lot of uncertainty. And so that then ripples out into those relationships and into your physical health and your mental health. So when you're able to break the cycle of that feast or famine, and you're able to reduce the unpredictable nature of your income, it impacts your personal life. So that's about planning. It's about making strategic investments in your business, and it's about being financially conscious of where your money is, and how much you need. To be able to sustain the lifestyle that you want. And that all comes back to planning and budgeting and being across your numbers and knowing what it is and understanding the numbers in your business, because when you do, you can then pay yourself in a way that doesn't have that fifth fate, feast or famine cycle, you know, you're able to just smooth out those rollercoaster ups and downs, to be more consistent, which will then lead to less stress of the unpredictable nature of business, which we all know happens, though, if you can mitigate those ups and downs as best you can by planning and being strategic, then it really just changes the whole feel of your business.
Remember, as women in business, everything is about feelings, and it's about energy and it's about how it is all connected to yourself, and what it is that you want to achieve. And remember that we don't necessarily want to make more money, what we want is to be able to have more time with our family, you know, not wake up with an alarm clock every day, to be able to have a long lunch if we want or to be able to take the afternoon off.
Money provides those things. But money usually isn't the driver for most women, it tends to be what money provides and that financial freedom. So when you're able to remove these hidden costs of financial uncertainty, it then allows you to create more of what it is that you want. And that's what I do with my clients. When I go through the financial wellness strategies and financial wellness checkups. We work out what it is that the clients want. We remove that financial uncertainty, so that they can just create more of those things that they want in their business. Because that's why we're in business, right? We're in business to be able to create the life that we want. So I help my clients to be able to, to know where those hidden costs of financial uncertainty are. And as we work around them, we create solutions to be able to relieve that stress so that they can sleep better so that they have less anxiety around financial uncertainty. They understand what's happening in their business so that they can be strategic and they can make decisions. That's the part I love working with clients to be able to really take away that hidden cost of financial uncertainty. So if you go to my website, www.erindavis.com.au/wellness you’ll be able to have a look at the financial wellness strategies and checkups that I offer for my clients. And if that is something that you feel like you want to have a look at, then send me a message. I would love to connect and see what those hidden costs of financial uncertainty are in your business.
