In private practice and running your own business, the mindset you bring to your financial decisions can make all the difference between stagnation and growth. As a business owner, understanding the nuances of your money mindset is essential. In this blog post, we will explore two distinct approaches to money management: the Money-Saving Mindset and the Investor Mindset.
The Money Saving Mindset
The money-saving mindset is often embraced with good intentions. After all, who doesn't want to cut costs and increase profits? While a money-saving mindset might seem like a prudent choice at first glance, it can actually end up costing you more money in the long run. It's essential to understand that this mindset can come with hidden expenses that may outweigh the initial savings.
Those with a money saving mindset value frugality, bargain hunting and minimising their expenses. This usually involves investing time and energy searching for the cheapest way to do something or prefer to do something themselves rather than invest in someone who can do it for them to save them time.
Expenses are often viewed as something negative to be minimised, as something which take something away from them. The mindset is focused on what is lost financially. Think equates more with a scarcity approach to money, which many of us have learned through early life experiences that we should hold onto our money as there isn't much of it to go about.
Pros to the Money Saving Mindset
This can work if you have lots of time to spare to research different options.
You enjoy the process of learning the steps and want to discover all the options available to you before making a commitment.
You value saving money over stress reduction, saving time, energy or mental headspace.
Cons to the Money Saving Mindset
You can often spend a lot more time trying to figure something out and it may take you a lot longer to get to your desired destination.
Sometimes this DIY route can lead to a state of overwhelm which means we don't then get the task done.
Sometimes it just highlights more of what we don't know and adds more to do the to-do list to achieve the task.
Sometimes taking on tasks ourselves itself is a form of self sabotage, of procrastination to getting things done, an avoidance strategy that feels productive.
It can also be the product of a threat based mindset that fears letting go of control or of feeling too overwhelmed in our businesses to take on new business projects.
The Investor Mindset
The Investor Mindset is about viewing money as a tool for wealth creation, rather than a mere means of hoarding or saving. People with the Investor Mindset understand their time value, and what they are willing to invest their time in. They also value their energy resources and are willing to take calculated risks to invest in products, services or training that will generate positive returns related to stress reduction, quality services and time freedom.
As such they view money with an abundance mindset which is rooted in the belief that there are ample opportunities and resources available. People with an abundance mindset are more likely to take calculated risks, invest in themselves, and view money as a tool for achieving their goals. They tend to focus on the potential for growth rather than dwelling on limitations.
Pros to the Investment Mindset
You value your time and energy as a priority.
You are able to invest time and money in products or services that bring expertise.
You can free yourself from managing all the elements of your business.
You understand that higher risks can often lead to higher rewards. It's about intelligently assessing risk, not recklessness.
You understand that not every investment will yield profits. You learn from failures and use them as stepping stones to future success.
Cons to the Investment Mindset
You may need to invest some time and energy on finding and embedding new investment opportunities.
It will cost you more in expenses than the money saving mindset but a good investment will give you better returns longer term.
You may invest in products or services that don't meet your needs, but you will learn from this and can take that learning forward into looking for new products and services.
You may have to let go of control and learn to trust someone else in your business.
"Invest your time and energy in that which will give you a good return; something that you enjoy, something you can learn from or something only you can do"
Cultivating an Investor Mindset
To avoid the hidden costs of a money-saving mindset, consider embracing a more strategic approach to your business finances. Invest wisely in areas that drive growth and profitability, such as marketing, technology, and employee development. Recognise that time and energy is a precious resource, and it's often more cost-effective to delegate tasks or outsource activities outside your expertise.
Helpful Investor Mindset Questions
Q: What is the financial cost of this task in hourly rate for me to do this vs outsourcing to someone else?
If you spend 3 hours a month on business admin such as invoicing clients and chasing payments, how much does this cost you a month in your hourly rate vs how much would it cost a virtual assistant to do this for you at £25-£40 per hour?
What could use that free time for that you are not spending on admin? (if you offered just one more client session a month it would likely pay for the 3 hours of business admin)
What is the energy and headspace cost to you in holding this task while trying to run your business?
What are the tasks you are not undertaking in your business that you would like to free up time, energy, headspace to undertake?
Outsourcing such tasks can not only save you time, but may give you more time to invest on restorative or productivity activities for yourself and your business.
Q: Can I pay someone to do this task who can bring more expertise and skill to it than me?
If so, is this worth paying the same or more than my hourly rate to achieve?
How much time, energy and headspace would this new task take up for you to try to complete it?
Completing your tax return is a great example of this. As a sole trader you can learn to submit your own return. However, the time, energy and headspace to do this may far out way the financial cost of outsourcing this to an expert.
Furthermore, most accountants will save you some or most of their fee in clever ways to consider your business finances that you are unlikely to know unless you have their expertise.
Q: Does investing energy and time into this task give me something back that is worth more than money or the time invested into it?
Does the task provide valuable learning and insight which adds to your experience and skills that once you have undertaken it you may consider future outsourcing of it later on down the line? e.g. designing your website as you like to create as you go and want to understand how it all works?
Does the task provide you with some light relief or brings you joy which you find helpful in your business? e.g. using Canva to design social media posts or workbooks which you could outsource to someone but you enjoy the creativity?
Can you consider the point at which you would want to outsource this, e.g. when the learning objective of the task is complete?
Q: Am I doing this task because it feels to much of a threat to outsource to someone else?
I don't want to let go of the control and I will do it even though I don't like it or want to learn from it
I don't know where to start to find someone to do this for me
I feel too overwhelmed in my in my day to day business to focus on outsourcing a task
Business consultation sessions can help you think through if there are any areas of self doubt and fear that you may wish to explore and overcome, and it can also help you to think through the practical considerations of outsourcing tasks and keep accountable to the process of a goal you wish to achieve in your business.
The Private Practice Suite Business Consultations
For support to optimise the way you run your private practice or to think through particular challenges you are facing in your business, or a particular business goal, please get in touch to see how Private Practice consultations can help you.
We offer one off 1:1 business consultation sessions via video conferencing or you are welcome to book a package of consultations if you would like to work on a specific business area over a few sessions.
Please get in touch for a free 15 minute consultation.
*CONTENT DISCLAIMER
The information contained above is provided for information purposes only. The contents of this article are not intended to amount to financial advice and you should not rely on the contents of this article to make decisions for your business. Professional advice should be obtained to explore your personal circumstances before taking or refraining from taking any action as a result of the contents of this article. Dr Sarah Simmonds, Trading as The Private Practice Suite disclaims all liability and responsibility arising from any reliance placed on any of the contents of this article.
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