Keeping your finances - and emotions - on an even keel - small business financial management

Home Office Computing, Sept, 1991 by Linda Stern

Try perspective for self-respect. Sometimes a little perspective is all you need. "I realize that getting one contract will never fix my life, and losing one contract will never ruin my life," says Mundis. Mellan describes a process of "debunking money myths." If you are starting to feel like a failure because you aren't making as much money as you'd hoped, look around for people you admire and respect. Are they the people making the most money?

Become a financial planner. Don't spend your whole income - put some away for the future. And "develop a clear cash-flow record for your business," says Felton-Collins. That accomplishes two objectives: It lets you know where you are at all times, so you can rein in spending or speed up invoicing as soon as you detect a gap. And it separates the business cash flow from your personal life, so you can determine "business is slow" and not "I'm hopeless."

Your computer can help. Mundis keeps all his financial records in Managing Your Money; I do, too. But there are many other programs on the market that will let you know at a keystroke just where you stand.

Give and get spousal support. Marriages in which one partner is self-employed and the other isn't can be stressful. The spouse who isn't involved in the business can feel worried about money and cut out of what's going on. But the entrepreneurial spouse can interpret the partner's questions as a lack of support and feel undermined. Felton-Collins suggests couples set aside a brief time weekly or monthly to talk over business and the family budget.

She tells of a client couple who were under enormous stress because the husband wanted to take $40,000 out of their $80,000 nest egg to start a business and felt his wife was undermining his efforts. The wife, who had already seen her husband go through two start-ups and failures, was adamantly against his latest plan. After much discussion, they compromised: He had to spend nine months researching the business before starting it, and he had to limit his seed money to $25,000. She would be the corporate comptroller.

FIVE MINUTES OF DREAD

It's almost impossible not to worry about business, especially when bills pile up during recessions and seasonal downturns. Mundis suggests you compartmentalize your fears. "If you are determined to worry about the business during nonwork hours, take five minutes for pure self-pity and terror. Think your worst thoughts, as in, |My God, I'm worthless. I'm going to lose the house....' Then you can go back to your life and not worry anymore. Say, |I already dealt with that today.'"

LINDA STERN is a contributing editor for HOME-OFFICE COMPUTING.