Feel safe in your business

In the June 2024 edition:

• How to feel safe in your business, no matter what challenges you may face in the future

• A resource that helped me understand myself better—and cut myself some slack—as a business owner

• A Catbird Care Package playlist—wherever you work, these songs will be good company

SOMETHING USEFUL

How to cultivate a sense of safety in your business

I started my first business so I could feel more free. Free from a corporate work schedule, free from office politics, free from endless career ladder climbing. Most business owners I know say the same thing—we all want freedom to do our thing, our way, on our own time.

But freedom is only part of the picture. To feel free, we first need to feel safe and secure. The joy and independence of entrepreneurship come with so much uncertainty—there’s always an undercurrent of worry that things could fall apart at any moment.

We’re simultaneously fully in control of our businesses AND vulnerable to factors outside our control. The stress of that reality can sometimes overshadow the joy. Luckily, there are ways to build an ingrained sense of safety and stability into your business, so you can focus your energy on building success instead of worrying about tomorrow.

The next sections outline different types of business safety, then I’ve given you some concrete steps you can take to feel safer in your business.

Let’s get into it!

Safety in numbers: Creating financial stability

I’ll just say it: It’s very stressful to be responsible for creating your own income month after month, year after year. It makes a 9-5 job with a paycheck look like the safer option, even though we know employees get laid off without warning all the time.

So no—a “regular job” is not financially safer than owning a business. But clarity and stability in your business’s financial foundation is a must for building a safe business. And the only way to gain clarity about your finances is to engage with your financial information on a regular basis.

Not just checking your bank balance, but also staying on top of your day to day expenses, income sources and outstanding payments owed to you, and understanding the seasonal shifts in your incoming and outgoing cash.

Many small business owners are uncomfortable with finances, and I understand why. Our society discourages discussing money and doesn’t educate us about financial literacy. Add in confusing bookkeeping software or an accountant who talks down to you (ughh), and you’ve got a recipe for financial unease.

But we can’t avoid our finances and have a business that feels safe. So what do you need to do to create financial safety in your business? Keep reading (or skip straight to the last section for my practical tips if you’re in a hurry.)

Safe space: Protecting your business and yourself

A big part of feeling safe in your business is being protected from malicious (or just disrespectful) behavior from other people. Not to mention the challenges nature and sheer bad luck can throw at you. But there’s a mitigation plan for all of these.

The goal is to be ready to withstand any disaster, whether natural or human-made. Knowing you’re prepared for anything brings a sense of peace and resilience, even when you can’t see what’s coming around the corner.

A combination of strong boundaries, clear policies and legal protections, and insurance coverage can proactively protect against a multitude of issues. And when a problem does arise—whether it’s an overdue invoice, an abusive client, or theft—you’ll be ready to enforce your late payment policy, terminate the contract, or file an insurance claim.

The next section outlines my specific recommendations for what protections to put in place to keep you and your business assets safe.

Safety first: Specific steps for a safe business

Ready to start feeling safe, secure, and less stressed? Here are your next steps:

• Build a business emergency fund: Save 3-6 months of fixed expenses—the bills you’d still have to pay even if you shut down temporarily.

  • Expenses like rent and utilities are fixed. Expenses like inventory, raw materials, and transaction fees are not fixed (aka variable).

  • This is my #1 tip for creating a safe business—if you ignore everything else in this email, this is the one thing you can do that will have the biggest impact on your business’s resilience. Save slowly if you have to, but save.

• Do a brief financial review every month: Once this habit is established, it shouldn’t take more than 20-30 minutes.

  • In the first week of each month, look at your expenses for the previous month. Check for anything incorrect, unusual, or unnecessary. Notice your largest spending categories. You want to become familiar with how cash flows out of your business each month.

  • At the same time, review your revenue for the past month. Did you hit your goal? Which products or services are bringing in the most revenue? Can you identify any trends or catalysts that influenced your revenue results? You want to become familiar with how cash flows into your business each month.

  • Speaking of goals, set a monthly revenue goal. Then you’ll know for sure whether you’re on track financially. Silence that voice in your head that tells you that you need to do more, more more—if you’re hitting your goals, you’re doing enough. If not, you can figure out what to do about it.

• Set expectations with clear, enforceable policies: Think about all the challenging behaviors your customers, vendors, and others might engage in and let them know right up front (nicely, of course) what will happen if they do.

  • Enforce a fee for late payments, appointment no-shows, last-minute rush requests, or other behaviors that affect your schedule and revenue.

  • Clarify any return, exchange, or refund policies in writing. People can be aggressive about this stuff and it helps to have a policy to point them to.

  • Set boundaries for appropriate communication tone and timing. For example, my client contract states that I reserve the right to communicate during daytime business hours only, and communication must be respectful on all sides.

  • For formal agreements with clients, vendors, and other associates (landlords, wholesalers, contractors, etc.) use lawyer-drafted and reviewed contracts. You want a solid legal document to fall back on if someone ghosts or tries to get away with other bad behavior. It’s a huge red flag if someone acts like a contract is a hassle or unnecessary.

• Get insurance coverage: There are insurance options for every type of business. Whether you have a brick-and-mortar space or work from home, use heavy machinery or just a laptop, sell products or services—there’s a policy for that. Do your research and get coverage that will protect you and your business assets.

• Have a team of pros in place: Specifically an accountant, an attorney, and an insurance agent. Find people who are used to working with small, solo-owned businesses and are able to answer questions and explain concepts clearly and respectfully. No one should ever make you feel bad for asking questions.

A sense of safety is rooted in feeling secure that everything will be OK, no matter what happens. Investing in a stable financial foundation and preparing for bad outcomes may not be the most fun parts of business ownership, but the peace of mind they create are worth the effort a hundred times over.

We can’t control everything, but we sure as heck can prepare for it. When we feel prepared, we feel safe. And when we feel safe, we feel free.

SOMETHING NEAT

Do you go above and beyond on client work, never drop the ball on your friends & family, but keep pushing your own priorities to the back burner?

Same. Gretchen Rubin’s Four Tendencies framework helped me understand why I do this—I strive to exceed external expectations, but I’m not great at honoring commitments to myself; I’m an Obliger.

Rubin created these “tendencies” for how we respond to internal and external expectations placed on us. Discovering my tendency helped me know myself better & set myself up to achieve things I want to do for myself, not at the request of someone else.

Highly recommend taking a few minutes to learn your tendency (it’s free!)

A LITTLE TREAT

I worked in the music industry for years. We used to make playlists for each other—it was the ultimate thoughtful gift + way to get to know someone + music discovery tool all in one. So I made one for you:

Spotify: Catbird Care Package - June 2024 
feat. Jon Batiste, Mitski, The Highwomen, Joy Oladokun & more

A fun collection of songs for working, hanging out, or playing in your studio or shop. I hope you love it!

WORK WITH ME

This newsletter is for everyone, but a one-on-one consulting engagement is tailored to you and your business. Here’s how I can support you:

• Business Planning—For solo business owners with a lot to do, and never enough time. We’ll refine, prioritize, and organize your goals, and I’ll create a road map for you to get them done. (My most popular service.)

• Operations Analysis—Is your business built on a strong, long-lasting foundation? An operational deep dive will reveal any cracks or weaknesses, and tell you exactly how to fix them.

• General Consulting—Get expert support with business challenges like workload sustainability, financial fundamentals, pricing, client communication, and more.

When you’re ready, schedule a free 30 minute intro call with me.

Thanks for reading—see you next month. If you have a business owner friend who would find this newsletter useful, please share it with them!