When I fell pregnant with Edvin, my finance brain started mapping out all the various plans, budgets, expectations, needs, desires and priorities, and not least of all, the financial STRESS I was expecting.
After becoming a mother I was left with a few new financial lessons and habits.
But it was only when I started my own business, I realized how useful these lessons really were. So I started sharing them with my clients. Most of them are parents, so they could really relate to the parenthood side of things. As most have been tried and tested, I thought it would be useful to share with you as well.
But first let’s look at 2 seemingly unrelated stats:
- Children of economically stressed parents are more likely to suffer economic hardship, emotional stress and a negative impact on their academic outcomes
- Poor cash flow management is one of the main reasons why small businesses fail in the first 3 years since inception
First one says that when children grow up in a household with financial hardship, their future is greatly influenced. The second one says that one of the main reasons new businesses fail is a lack of money.
In both cases money (and how it is managed) holds a good deal of influence over the success of a child or a business.
The savings nest
When you’re a parent, emergencies have a way of being way more complex then it initially looks like.
Build a savings nest to cushion the blow!
When you have a business, it’s so easy to forget about its needs – because something else more important will always come up. But if you consider your business as a separate entity, it will be easier to build a savings nest. Set up a direct debit every month. Or if you have quarterly targets, redirect any extra income that you made above your target into your savings nest.
Your accountability buddy
Even before Edvin was born, all the financial decisions surrounding him were discussed and made alongside my husband.
It’s simply too easy to lose track and out of love, go a bit over the top on many things that could go obsolete pretty fast.
As an entrepreneur (especially a new one), it’s just as easy to get excited when your business makes money. And making the best decisions for your investment should be made alongside your partners if you have any. If you’re running solo, consider having a financial accountability buddy to act as a sounding board for your financial decisions. It could be your business mentor, your finance coach, or a virtual CFO.
Shifting priorities like a pro
From the moment I found out I was pregnant, I organically developed this new skill of shifting priorities. It’s something my brain just started doing.
We know that women being better multitaskers is a myth. Neither men nor women are actually any good at multitasking. But there is some science that says that women are better at planning ahead and arranging priorities. In 2010, a research study in Behavioral Neuroscience found that 3 areas of the brain in new mothers had grown. Among them the pre-frontal cortex, key in planning and decision making.
It could be that it’s a skill evolved for motherhood, but it is definitely a skill that will serve you well in business.
The addition of a baby means you learn to juggle priorities in a way you never thought possible.
So for example, diapers or a crying baby are an urgent priority. You don’t wanna find out you ran out of diapers at 2 am with a hungry, screeching baby on your hands. Feed the baby or get the diapers? The right answer is of course both – magically prioritized in the right order for your mental health and the baby’s wellbeing!
On the other hand, when you have a business you will come to find that a healthy GPM is really key to your business success. Also getting paid a sufficient salary is essential to your survival and satisfaction. And yes, staying profitable and on top of your cashflow has to be a priority if your business is to grow.
Needs, wants and desires and what they mean (for your brain)
I sometimes see my clients putting their needs last. Such as never paying themselves a salary. It’s something I recognise as a mother. In those first few months, my baby’s needs came first, even before my shower, sleep or food. But you have to survive to make sure you can take care of your baby. And once in a while, you need to treat yourself and make sure you live a little.
If you never (or rarely) do, resentment sets in. Worse even, your psychological sense of stability and fulfilment is threatened.
As a business owner you will end up resenting your life as an entrepreneur. Or you end up making bad decisions, like debt, losing your health, threatening your well being and so on.
Make room for your needs, wants and desires to make sure you have a sense of fulfillment.
I created a super easy to use freebie. It’s all about how to set the pricing to cover your needs, your wants and ultimately your desires.
Because if you’re not, why are you even running a business?
Check out the freebie here!
You learn to delegate
Being a mother meant I had to delegate.
I am pretty self-reliant overall, but as my pregnancy was getting further along, I learnt that you don’t get any brownie points for doing everything yourself. You get burnt out.
There is a reason for the saying “it takes a village”.
When it comes to your business, it also takes a village. While you will do most of your day-to-day operations, as your business grows, you will have to let go and rely on your team for support. You will also need to invest in experts to get you to the next level.
As a mother, but also as a finance professional and a business owner myself I am lucky to have a unique perspective. I am happy I can take my experience as both a parent and as a CFO working with multi-million dollar companies to help my clients make even better decisions for a successful business.
Economic stress is a telling sign for both the success of your child but also that of your business. Whether you start a family, or a business, all of a sudden there is an extra set of needs to consider. And their success or demise rests, at least to begin with, with you.