68. Business Finances: Boundaries in Business Leadership, Part 4

business financesIn this discussion on business finances, Sarah Stokes and I discuss the importance of setting financial boundaries in business.  We discuss topics such as setting boundaries around pricing and payment, the unintended consequences of not having financial boundaries, and the importance of creating sustainable financial practices in business.

We emphasize viewing money as a tool for achieving personal and business goals. We explore how business finances, when leveraged properly, result in personal income, sustained businesses, and overall financial health. Money is a renewable resource and we get to decide  how we interact with money for sustainable business growth.

Learn more about Sarah HERE.

Main Episode Takeaways

  • Money is a tool for our business development. 
  • Not having boundaries with your business finances impacts you both personally and professionally.  
  • We must set financial boundaries to protect our income and sustain our businesses. 

Want to learn more about boundaries?

– Boundaries Awareness quiz HERE
Take my Boundaries 101 Course
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68. Business Finances: Boundaries in Business Leadership, Part 4

Mary: Let’s talk boundaries. I am here with Sarah Stokes and we are discussing boundaries with business finances. 

Sarah: Ooh, so good. 

Mary: It’s a fun topic, huh? 

Sarah: Sure. We both say money’s our friend, so we are the ladies to tackle this. So if the listeners like, ooohh. Money can be your friend. 

Mary: Money is our friend. Yeah. That’s the reason why we work. That’s the reason why we have businesses is because we wanna make money. If we’re not making money, we’re not doing it. Right. 

Sarah: That’s right. That’s right. Let’s make some money. 

Mary: Absolutely. So when you hear business finances and leadership around business, finances and money. What kind of things come up for you, Sarah? 

Sarah: Well, truly I’m like, I feel like I’m envisioning a Tweed three-piece suit at an old desk, and I feel like there’s a calculator that, you know is still push button, you know, the old school way of thinking about money and finances and the, you know, 1985 version of what that looks like with a money manager guy who’s smarter than you and you don’t know what you’re doing, right? Mm-Hmm. So it’s pretty funny that when I hear you say that, my brain, even though I’m an advanced woman who’s made a lot of money, goes back to this like quintessential old school way of thinking about it and I just smile at myself ’cause like money’s so fluid now and think of all the ways we work with it and receive it, send it through the ethers of our phone. And it’s just so different now. But my brain wants to go back to the antiquated thoughts of it, like some, 

Mary: What are some of those old school thoughts? 

Sarah: Like this old white guy, so patriarchy approved, right? Like way back in the Fidelity office and he’s telling you you haven’t done retirement. Right? Kind of that stuff, right? That I don’t know what I’m doing and all of this, and here I am, 10 years into business, I’ve made millions. I still think there’s so much more I have to learn. I have to do it right. So hopefully that helps somebody else feel at ease because even to this day, having done money work for years, healing my relationship with money, learning how to be a better vessel and steward, still my brain wants to say, you’re doing it wrong all the time. So there’s always a growth edge, but I’m actually so excited to show up and own that part of me because I’m like, you know what? So what if I do it the way the guy wouldn’t in my vision? You know, I get to do it my way. And that’s actually the fun and freedom of being an entrepreneur, right?

Mary: Yes. Yes. And what if we let go of what we should and shouldn’t be doing? What if there really is not a right or wrong, there’s just decisions around how you wanna do it, and we get to create our own boundaries. 

Sarah: Oh yeah. And you know, I’m the should free lady. And it’s like, yes, there actually is no right way. It’s the way that works for you and a way that, how can you be supported? How can money be this beautiful partner in your life, a tool that you use, not a weapon to make yourself wrong all the time. Mm-hmm. Yeah. 

Mary: Yes. I love it. I love it. So when we start talking about money and boundaries in our business. Some things that come up for me are things like what we pay ourselves, what our income is, especially for business owners. And unfortunately I see sometimes business owners that are working so hard and not being paid right? That they are not actually giving themselves an income. 

Sarah: It’s chronic and pervasive. In fact, I find fewer business owners now, I’ve been working with them for 10 years now. Fewer pay themselves than don’t. And it’s like, how can we flip this on its head and like bust that stat open. So many people think there’s this perfect time or perfect amount, and it’s just like, oh, how are they living? Well, they’re suffering and I don’t wanna see that happen. Mm-Hmm. 

Mary: When I became a new business owner, I received some advice that I’m so grateful for, to have this simple structure in my business that I would pay myself half. So every dollar that came in, I would get 50 cents and I’d move it from my business account to my personal account at a certain day every month. And then I would put 25% aside for taxes and savings, and I would have 25% left for operating costs. And I’m so grateful that I received that advice very early on because it’s surprising to me how many business leaders operate without a profit. Mm-Hmm. And without an income and that the operating costs are oftentimes so big comparatively that they burn out. I think it really does contribute to why businesses fail. 

Sarah: Absolutely. I’m so glad you got that advice ’cause I did not. Right? Mm-Hmm. And I was that woman running to the bank with the $5 check that somebody finally gave me because I didn’t have boundaries around payment times. And so I’ve learned so much. Right? And so I see like how much wisdom that advice and you actually implemented it and you did put boundaries up around how you paid yourself and what your operating expenses were able to be. Because I was reactive to money for so long, and then when it finally started coming in, then it was, I would only pay myself what was left over. Hmm. Right? Or you’d pay somebody else more so that they stayed. So you weren’t without that team member so that your life didn’t get worse. Right? Mm-Hmm. And so the, the cycle becomes this like never ending hamster wheel of you eating last, like we talked about. Mm-Hmm. And it doesn’t work. You’re right. I did burn out. Because there wasn’t enough to go around and then so personal, you know, expenses at home would then go on a credit card because the business dragon had to be fed. You know? And so many people do that because we think we have to, or you hear the folklore of you gotta put everything back in your business. 

Well, the truth of what I think you are talking about is you have to be sustained or there is no business. I talk a lot about, I heard this from the first CEO that ever hired our marketing agency. He said, Sarah, no money, no mission and rest is soul, Mike Christiansen. I remember that, because it, it turned it into, oh yeah. I am a mission driven entrepreneur. I do need money to fund this mission. Namely me, right? My goals and the team members I’ve made promises to. And then for the future, I love that you put money away for taxes. How many people get into tax trouble and that adds up? Or the compounding interest on debt? Ask me how I know, right? So no money, no mission, and that I think helps diffuse a lot of the shame and blame around doing money wrong. I’m doing air quotes. Mm-Hmm. Because if you remember, yeah, your business has to survive. You have to actually be paid for it to keep going so you can help people in the way you wanna help them. And we forget. Mm-Hmm. Sometimes until it’s too late. 

Mary: Absolutely. So one of the things you mentioned was around payment for services or products, right? And how we create pricing, how we collect payment. Let’s talk a little bit about that and the opportunity that we have as leaders to have some boundaries there.

Sarah: Yeah, I wonder if everybody listening has had some moment where they’ve even been maybe burned or they discounted themselves even before somebody asked. There’s so much tied up with boundaries around our pricing and there’s so many opportunities to be tested. So I think about how we make decisions. I like to say, please price everything full alignment, meaning it’s true for you, it matches the value that you’re providing, the results you’re creating and no resentment. Because we under price so often because we forget about the resentment piece. So you might be having a little bit of a confidence deficit around your product. Maybe it’s new or your service, and you think, well, it’s gonna be easier to sell at this price, right? But you forget about you delivering it. And if you under price and don’t have boundaries around that, you’re accidentally gonna resent your customer. And then that’s a lose lose instead of a win-win. So I say full alignment. No resentment pricing. And there isn’t a precise formula for that. A lot of times our brain wants a perfect formula that’s approved by the Harvard Business School. This is going to be true for you. Make sure you’ve covered your costs, right, and then you’ve added in the delivery, your payment so that you are paid and then decide that you’re gonna hold true to that price because especially when you’re wobbly, the universe will send these little opportunities to practice. That’s what I say, opportunities to practice. I get it all the time. Hey, do you have a payment plan? I say, no, I don’t. It’s pay in full. And I’ve done a lot of work around that. Hmm, right. Some of my items are large tickets and they’re still paying full. Why? Because it’s best for my business. Mm. It may not be best for someone else, but old pupil pleaser Sarah, the second someone asked for a payment plan, I’d create one. Guess where that landed me? Chasing payments. That person wasn’t actually ready because it was actually just too much for them, and I decided it’s actually in the best interest of my systems for my business. ’cause I don’t wanna chase payments. I don’t have the setup to chase payments. I don’t want to. And what was happening was they had to re-decide every month. Mm-Hmm. And they had to go through, especially if there was a declined payment, that’s a whole ball of wax that they had to go through and endure. And what happened was when I moved to pay in full, it was actually in the best interest of my clients because they made the decision one time. Mm-hmm. And then we got to work. And so that’s how I can stay boundaried around it because I remember it’s best for them and it’s best for me. Now I’m tested all the time with requests, and I appreciate that opportunity to practice, but I am no longer willing to drop that boundary because I know what happens when I do. Right? Mm-Hmm. It just, it’s my lesson. And so if somebody listening to this can benefit from that, you don’t have to be pay in full, that’s not the point here. It’s just what’s aligned for you and what’s no resentment? Because I never want to feel like. I’m thinking about, they didn’t pay me the price I actually wanted, whose fault is that? Right? Who created the price? Even as a consumer. I have an example from today. I had someone charge me $10 for the most magnificent thing, and I said, this is $10? And she’s like, well, yeah. And I said, I think, you know, and I smiled and she knows I’m a business coach, and she smiled too. And I’m like, yeah, I, I’m guessing just the bottle you put this in is $10. You know? And so even as a consumer. I didn’t feel awesome paying $10 and, and yet that’s what it was, right? So I could have thrown more money at it, but it was her opportunity to say, yeah, actually this is more than $10 and it’s not sustainable for me to charge cost for something, you know? Mm-Hmm. So it’s everywhere. It’s everywhere. We just need to really visit that value and help us grow that confidence around the price, and then be boundaried. 

Mary: Mm-Hmm. Yeah. So when we don’t have boundaries with our finances, then what is the unintended consequence of that? What happens? 

Sarah: Well think about it, you start to slide backwards in terms of your operating expenses, right? If you’re accidentally resenting your customers, what kind of energy are you putting out? No, I love to think about the energetics of your marketing. You’re gonna not want to sell more of that thing that’s not priced properly. You subconsciously will know it’s not sustainable. So there will be some level where you don’t even show up and sell it. Mm-Hmm. Well, and then long term, that ripple effect, pretty soon you’re not getting results. Pretty soon the, the clients that you might be drawing in are maybe that bargain shopper when you want to have a long-term healthy client, you know, retention. So really you do need to think about the health of our business. It’s like our bodies, if we put not enough food in, we’re not gonna thrive. Right? It same with our business. It needs the fuel of cash flow to thrive. And so do you, so there are lots of ripple effects. And then let’s just say the tax bill comes and you haven’t done what Mary so smartly did and set aside some tax money, then your panicking, then your health suffers. I mean it’s pervasive. Really any and every facet of your life is affected when you aren’t boundaried around your business and your money. Mm-Hmm. 

Mary: Absolutely. Yeah. And what does Serena Hicks say? 

Sarah: So Serena Hicks is a brilliant money mind out of Texas, and she says, “boundaries make bank.” And boy is that true. Why? Because let’s just give the example of I got that DM, hey Sarah, do you have a payment plan? Now, if I would’ve said no, but let me create something for you. Right? Then I would have not been in my integrity. This person maybe would’ve made all the payments, maybe not right? And so my boundaries make bank for me and her. Why? Because I said, you know what? I don’t have a payment plan, but you have a month until the renewal. You know, what could you do? And so for me, holding my boundary and like asking her to be inspired of what she can do, she might be making bank because of my boundary. I hope she is, because now she has a mission to not just settle for, I can’t do it, she wants it. So now she’s gonna go out and create money. And she’s seen how a boundaried business owner lovingly says, I don’t, but here’s what we can do. We have a month, what can we do? So now she gets that moment of seeing me lead by example as well. ’cause we’re talking about business leadership. Me being boundaried is really critical for my clients to see. Mm-Hmm. And I gotta walk that talk and be a match. 

So boundaries make bank in so many ways. When we discount and we don’t want to, and we’re discounting out of shoulds, you end up actually losing a lot of revenue. So I have a client who has a you know, a, a painting crafting workshop business. Mm-Hmm. And it was just industry standard for them to do coupons all the time. She never questioned it. It was how the franchise did it, and when we looked at it, it was $45,000 in money she didn’t have to work harder for. She just needed to believe that her ideal clients didn’t need a coupon. Honest to Pete, she had a better year. More people came because what was happening was she was resenting the couponers. They were asking more questions. They were canceling at a higher rate. And I’m not saying if you use coupons, you’re a bad person. Don’t hear me wrong. 

Mary: I grew up on coupons. 

Sarah: We love coupons. She was just training people to wait for the coupon to book, because why wouldn’t you? So now it’s a treat. So she’s changed her whole mindset. Her boundary is I give a coupon when I want to treat and reward my customers. She had her best year ever, put 45 grand back into her business without doing any more work. So you can look at your business, where are you discounting? What kind of bank could you make with some boundaries? Hmm. And it doesn’t, A couple people might be displeased, a couple, and they were the people that were ending up being extra work anyway, right? They’re still good humans, but what you will find is your right fit people are gonna be so happy to pay your aligned price and they want to see you succeeding. They wanna see you being able to make a car repair, to buy new tires, to go on vacation with your family. They’re happy for you, and we forget that our clients want us happy too. 

Mary: Absolutely. Yeah, I love that so much. So when it comes to finances in our business and boundaries. I love that you talked about it doesn’t have to be pay in full for you or for whoever’s listening. It doesn’t have to be that, but the boundary piece is really around deciding what you’re willing to participate in and what you’re not willing to participate in. And being honest with yourself and asking yourself those questions like, am I willing to have payment plans? Am I not willing to have payment plans? Am I willing to work without paying myself? Or am I not willing to work without having an income? Am I willing to help people for free if I perceive that they can’t afford it? Right. Or am I not willing to help people for free if I perceive that they can’t afford it? And you notice I said if I perceive that they can’t afford it because, ’cause we don’t ever really know what other people’s, people’s financial situation is and what they can and can’t afford. And I have seen a lot of assumptions around that. That we as business leaders make, and it’s pretty common to make, but really some questions we wanna ask ourselves are like, how long am I willing to continue doing this? How sustainable is this for me, for my business? Because our businesses are supposed to sustain us. Yeah. And the boundaries that we set around our finances really are for our own sustainability. 

Sarah: Mm-Hmm. Yeah. It turns out our business is supposed to have our back financially. It turns out that’s actually what it’s for. Yes. Newsflash. Newsflash. Exactly. Yeah. I love those questions. I love how it comes back to that core boundary question, what am I willing to participate in? Mm-Hmm. And what am I not willing to participate in? And wow how transformative are those two questions? Mm-Hmm. That we haven’t asked them in a long time unless you’re doing work with Mary. I bet we haven’t. Yeah. And we go through life reacting and surviving and we know, and I have all the compassion for the survival with finances. Like it feels like you’re feeding a dragon sometimes, right? And, and the money, you might as well be burning twenties in the fireplace sometimes it feels like, and this is where boundaries can actually save the day. Where are we shoulding on our business? So many shoulds and so many of them are expensive. Are you even using it? And so even boundary questions around, okay, what did, what did I think I needed in the last calendar year that I actually haven’t even opened, or the software I keep paying for? And how can we ask those questions too? Because so much of the time it’s a boundary around our own knowing of what we are able to do, what we need for our business, and we can be really susceptible to the noise out there and the shoulds of, you need this thing and this thing and this thing. And asking yourself, is that even true? Is this actually furthering my mission and getting me closer to my financial goals? Mm-Hmm. And a lot of times we kind of just turtle up and we put our head in our shell sometimes and we don’t wanna deal with it. Mm-Hmm. You know, setting the boundary with that, that software. Okay. No, I actually don’t want to pay for 20 people when my team is 10, you know, that kind of stuff. So it’s everywhere. The question that you asked, I think can be applied to every single area of our finances. And for debt and what we are willing to, to rent money for and what we are not willing to, you know, kick down the road. Because the opportunities to spend are endless. Mm-Hmm. And how do you wanna show up and lead your business this year financially? And how can you be paid and how can things thrive and flourish? And how can you have overflow instead of this survival mode that so many people get into? Yeah. 

Mary: Oh, absolutely. And I agree that we have to get real with ourselves sometimes about what our ROIs are for each of the line items in our business budget. Right. So if I’m spending this amount and this type of marketing, like what’s the ROI for that? And if I’m spending this much for this offer that I’m providing, what’s the ROI for that? And be willing to ask ourselves those hard questions about like, okay, well there will be times where you’re ROIs just not there or it’s not there yet, and you have to ask yourself, how much longer am I willing to continue spending on this before I’m getting the return that I expect to see? And I think that those questions are important, but they’re also difficult for us to be honest with ourselves about sometimes. And to be honest, we all want to be perceived as successful in our endeavors. We put so much energy and heart into the things that we’re doing and sometimes we have to be able to learn when to say no to this offering that’s not working or this marketing plan that’s not working, and, and those kinds of boundaries. Sometimes we might have to say no to our entire business that’s not working. And when it comes to reasons why we say no, oftentimes it’s gonna come down to the financial as well. 

Sarah: Mm-Hmm. Yeah. And a lot of times, you know, I think about that can shut people down. Again, a lot of my clients are neuro magical. When they think ROI, they go, I don’t know. Mm-Hmm. How do I know? How do I know? And then pretty soon, like, don’t even want to look at it. Mm-Hmm. What, another way to do that if ROI is overwhelming would be to say, do I value this? Mm-Hmm. Right. Because I can’t probably prove ROI on my 90 minute massage, but I know I value it as a business owner, my body feels great, right? I need to decompress. So I like to talk about it as like, do I value it at this price? And let’s go. ROI is really smart, and if that shuts you down, just say, do I value this? Because we know some people are, they’ll tell you all day, I’m not money motivated. No, but are you motivated to have a month off with your kids in the summer? Yep. I’m motivated by that. Okay, cool. What does your business need to create and what kind of boundaries do you need to have so that that happens? And it changes it for them. Because money is actually a huge part of that equation. Mm-Hmm. But you put it in a little bit of a different context and it helps them say, oh yeah, actually that motivates me a lot to go make money. Because the result is I get more time with my kiddos in the summer or whatever. You get to go to Fiji, whatever you wanna do. Some people want that handbag or whatever, right? It’s different for everyone. But money is just that conduit for us to make our lives the dream life, the juicy good life that we want happen and yeah. No money, no mission. 

Mary: Yes. And there’s plenty of it friends. Is 

Sarah: I love that you know that. 

Mary: There’s so much money out there. There’s plenty of money and you can create even more. 

Sarah: Totally. Being a believer in, even if you’re just willing to believe it’s possible that you create money on demand. Whoo. That’s a game changer. Game changer. Yeah. And I, I like to say, well, could you find something right now in your house that you could sell on Marketplace for 25 bucks? And people will be like, yep. See, you can create money on demand. Mm-Hmm. Could you find something that’s ready to go in your business that you could sell right now to the person that’s waiting for you to put it on offer? Yep. Same. But when we make it this big, giant thing that has power over us, it just shuts us down. Yeah. So, yes, I love it. Money is a renewable resource. You can create it. In fact, they’re making more every day. 

Mary: That’s right. That’s right. That’s right. All right. Well, let’s wrap up our thoughts for our listeners. Sarah, what would you say to those who are listening to this discussion as kind of a final words here? 

Sarah: Yeah, I think the biggest thing is that money wants to help you. It is a neutral tool. It is. Literally if we laid a a hundred dollars bill in between Mary and I today, it just is. Money just is. And of course it’s what we project on it. So why not project that money’s trying to help you have the life you want? And just like a puppy. That puppy’s gonna respond way better if we’re like, Hey, good girl, good girl. Right? Here’s a, here’s a treat and a scratch behind the ear, versus how we talk to our money. Drastically different. You would never talk to a puppy like that, and yet, here we are, talking to our money like, you’re not enough. Where are you when I need you? Oh my gosh, you suck. Like all this crap that we say to our money. Reframe it as, would you ever say that to a puppy or a little kid? Nope. You wouldn’t. So money wants to be a partner in your business. Let’s nurture that relationship. Let’s see it as the tool that it is the thing that makes everything you want possible and change it from this thing that has power over you to determine your happiness and in turn see it as a relationship that you’re gonna nurture just like every other important relationship in your life. And that changes things and it just softens everything. And if we can just get a little bit more comfy with that money relationship, it can work wonders in your life.

Mary: Hmm. I love it. And my final words are just to get rid of those shoulds. Yeah, there’s no shoulds when it comes to money. You just get to decide. You get to decide. I get to decide. Sarah gets to decide. All of you listening, get to decide how you wanna participate with money and how you don’t wanna participate with money and do it for reasons that you like.