I Screwed Up My Finances. Don’t Be Me.
I took my business finances, threw them in a dumpster, and then lit the dumpster on fire. 🔥
The saddest part? I thought I was doing everything right.
In hindsight, financial management via arson doesn't seem wise, but I was ignorant. I had no idea that I was burning my world down one bad money decision at a time.
Here were some of my most problematic rationalizations:
"I deserve to work in my zone of genius" --> Hired too many folx to do things I should have automated or just not done at all
"This is just a bad month...and so is this one... and this one..." --> Took on predatory debt to cover short-term expenses instead of immediately downsizing
"This expense is an investment." --> Made horrible decisions based on ego, fear, and bad advice instead of getting clear, managing by my P&L/Balance Sheet/Cash Flow, and using connected intuition
"It takes money to make money." --> Let my bougie a** attitude get in the way of seeking free, quality support first. I wasted thousands of dollars on courses, coaches, and gurus.
"I am not good with money" --> Outsourced money management to quality pros but gave up my agency. I implanted the idea that money is not my friend and Quickbooks is confusing so deeply inside myself that it's a wonder the Universe sent me any more money to manage at all. It was a cruel, masochistic game of inception without the benefit of Leonardo DiCaprio's acting chops.
I could go on, but you get the picture.
If any of that sounds like you, don't worry. I found ways to douse the blaze, and I have a few tips for you.
1. Understand what lenders are looking for
If you are "bankable," then your business is healthy, whether you decide to go out for a line of credit or a loan or not. A healthy business won't have to whip out the fire extinguisher.
Measure yourself using the "5 C's of Credit"
Character - Who you are but, mostly how good your credit score is
Capital - Assets and cash
Capacity - Your ability to generate cash
Collateral - What the lender can go after if you default on the loan. No collateral? There are programs that can help.
Conditions - How the money will be used, which relates to how the investment will be repaid, and market conditions
If you are thinking about financing, talk with a professional advisor before you sign anything. There is a lot of shady business and quick money out there that are more trouble than they're worth. Also remember, the best time to get a line of credit is before you need it.
2. Clean up your credit
It is a sad truth that your credit score (personal and business) is the key to unlocking financial opportunities. If your credit makes you cringe, you can get help.
https://www.findhelp.org/ has reputable non-profit organizations that will help clean up your credit
https://uqual.com/ is a great option that I've personally used. Email Mat at mathew@homeloansassist.com and tell him I sent you to get a big discount on your first month.
3. Explore CDFIs
Banks aren't the only ones with money. Community Development Financial Institutions (CDFIs) may be able to work with you when traditional lending is not an option. If some of those 5 Cs feel more like Fs, don't give up hope. CDFIs are also great if you want to work with someone who is focused on uplifting entrepreneurs who identify as women and people of color.
CDFI Locator (this isn't even all of them)
I've worked with AltCap and have been incredibly pleased with our partnership.
4. Learn to read your financial statements
Yes, looking at a Profit & Loss (P&L) statement can be intimidating. But would you rather be intimidated by a document or by bill collectors calling at all hours? Yeah, I choose the document too.
The cool thing is, once you understand what you're looking at, you will feel empowered and will make more lucrative decisions.
5. Apply for grants
Can completing a long grant application be a pain in the butt? Yes. Does getting free money feel amazing? Absolutely.
Hello Alice is one of the biggest grant sites
6. Get free support
You are probably tired of hearing me tell you to start working with America's Small Business Development Center (SBDC), but I don't care lol.
Working with this FREE program, I have saved money, refinanced debt, developed 5 years strategic plans, gotten connected with a better network, and received the coaching I need to put my fire starter days behind me.
There is no need to struggle.
Bottom line: If you've made money mistakes, you can fix them. You have options. You aren't alone.
