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Money Resolutions for Business Owners

Check out timely blog from guest blogger Elise Thornton!

Believe it or not, we’re already approaching the New Year. Indeed to many, in 2020, it can’t come soon enough! This has been a turbulent year for virtually everybody in the business world, across industries. And while the transition to 2021 will merely be symbolic in most senses, it still brings about an opportunity for a fresh start.

That can mean a lot of positive and exciting things for all kinds of companies. But with the idea of a fresh start in mind, I want to focus on some ideas for money-related resolutions that family business owners can make now to ensure better business success and stability in the year to come.

Rewrite Your Money Narrative

This is an idea that was at the core of an 
April blog post on ‘Money Mind During COVID-19’ and it’s also a great place to start when looking ahead to 2020. Specifically, the idea of rewriting your money narrative, in this context, is to adjust your mindset towards earnings as business owners.

It is typical, particularly during times as difficult as those we’ve been through in 2020, for people to pursue income out of a sense of need and responsibility — which is admirable in a sense, but which can also lead to high-stress efforts that merely result in getting by, rather than thriving. Instead of accepting this mindset then, focus on rewriting your narrative in 2021. Adopt a “high abundance” mindset and look at money as something you and your family have the ability to earn (and then share) rather than something you have the need to strive for. It’s a subtle shift, but one that leads to more positive feelings, and ultimately more success in business.

Assess What Holds You Back

This is an idea that can be easier to consider than actually implement. But if you really take it to heart and do a thorough self-assessment — not just of your family business, but of your financial situation, your day-to-day habits, where you’re spending your time, and so on — you may well be able to gain some insights that directly lead to more business success.

This may look different for different business owners. Perhaps when you look back at 2020 you will (quite understandably) recognize that you collectively had a hard time maintaining focus for an ordinary workday. If so, consider adjusting your hours to work better in shorter bursts. Maybe you’ll find that you spent heavily on an aspect of your business that isn’t offering a return. If that’s the case, take some time heading into 2021 to determine how to make that part of the business either more affordable or more effective — or nix it altogether. Again, this idea will apply differently in different situations. But a thorough self-assessment makes for an excellent way to enter the New Year.

Improve Your Liability Standing

It is important to consider some more practical adjustments that might improve your money situation in 2021 as well. And one that is worth considering for a lot of people operating their own businesses is a change in liability standing. In all likelihood this is something you never thought much about when starting off as a family business owner, focusing instead on building a business you could profit from and be proud of. But if you’re like many business people, 2020 may have shown you just how important it can be to separate your own financial standing (and that of your family) from that of your business.

This consideration is essentially what leads so many to ultimately make the transition from sole proprietorship or partnerships to forming Limited Liability Companies. As is explained in some detail in 
ZenBusiness’s overview of the advantages of an LLC, the main idea here is to “keep business and personal separate” so that you are “protected from any business debts, claims, lawsuits, etc.” The hope of course is that burdensome issues of this nature won’t come up to begin with. But do give some thought to making your business venture more official so as to enjoy this kind of protection against business debts and liabilities. It will give you more of a sense of independence, and can keep you financially confident in difficult times.

Get Aggressive About Funding

Your job as an entrepreneur is not to continually seek funding. In fact, thinking this way ultimately puts you on a slippery slope toward being too concerned with obtaining money, and not preoccupied enough with positioning your business to generate money. But this doesn’t have to be an all-or-nothing proposition either. Particularly if 2020 was difficult for you, and your business needs an influx of capital, it can be a worthwhile resolution to enter the New Year taking a proactive, aggressive approach to securing fresh funding.

Naturally, the funding options available to you will depend on your situation, needs, and preferences. One popular option emerging from the difficulties of 2020 is likely to be the pursuit of grants. Per 
The Balance’s explainer on small business grants, this sort of arrangement can result in what is effectively “free money for your business” — and while securing a grant is by no means a given, it’s likely that government incentives to “reopen” the economy will in some cases lead to more available grant funding. Additionally of course, you can seek other methods of funding common among startup founders, such as bank loans, angel investments, peer-to-peer lending, and so on. But the bottom line is that if you need capital, don’t wait. Get aggressive early so that you don’t have to focus on obtaining funding any longer than necessary.

Remain Optimistic

Above all else, approach the New Year with a sense of optimism as well. I sometimes see the opposite recommended — the suggestion that business owners should maintain a sense of pessimism in order to prepare for the worst. There’s logic in that, but I’d suggest an optimistic, forward-looking approach positions you better to see opportunities in the challenges you face.

This idea is particularly relevant heading into 2021. As an 
Entrepreneur post on trends in innovation pointed out, there are a number of exciting things happening in startup environments that may actually help people in business to accelerate past 2020 in a constructive and interesting way. We’re seeing many in the business community changing the ways they interact with customers, using new technologies, focusing more on sustainability, and taking more interest in social responsibility. And in many cases, continued focus in these areas can specifically help you to overcome difficulties, financial or otherwise. So my most important tip is to keep this kind of forward-thinking enthusiasm alive. 2021 will bring fresh difficulties, and approaching them as opportunities will help your business and your family in more way than one.

Published by Sharon Spano, Ph.D. December 3, 2020