Today, I want to remind you – or maybe tell you for the first time – that there are ways that you can look at your numbers effectively to be BOTH a successful, risk-taking entrepreneur while also being cognizant of how you are spending, managing, and growing your money.
“Your Budget Is Not Your Bible” is a mantra, a mindset of how to both have a healthy respect for your numbers, while at the same time growing in your understanding of how to be a successful entrepreneur. Of how to take risks with money with an expected rate of return on your investment.
THREE CRITICAL PRINCIPLES FOR NOT LETTING YOUR BUDGET CALL THE SHOTS
There are three principles that, once you understand them, will free you from letting your budget make the big decisions for you. This approach will create freedom, success, and highly scalable law firms. I promise.
1. You need a financial plan for your business
Now, you might be thinking that’s somewhat counterintuitive to the entire point of this post. But I didn’t say you don’t need a budget at all, right? I said you need to stop giving it ultimate decision-making power over your business.
Any successful, healthy business is built on strong foundations, which includes a well-thought-out, well-executed financial plan. A strong financial plan is there so you have reliable information that you can take into account when making decisions.
The key phrase here is “take into account”. We let the budget inform our decision, but we’re not giving it the final say.
2. You need to be willing to disregard that financial plan
Numbers are powerful in getting you where you want to go. What is not included in math, however, is faith. What is not included is that at some point in time, you have to decide that you are more than dollars and cents, that you are more than what is within the box, that you have potential beyond yourself that you can really only tap into when you invest the time, the energy, the motivation, and the opportunity into the area you want to see more of in your life.
So, the idea here is to see your financial plan as a series of investments that have a certain rate of return. And to have a level of faith in yourself and a level of tenacity in your decision-making to say if something is good for you and for the business, and you can find a way to make it work, you will make it work.
What I see, and what I help my clients to see, is that if you take what is available to you now and you invest it in yourself, you get two times, five times, ten times, twenty times return on investment. The people that start to see the world that way, those are our clients that doubled during the pandemic, those are the clients that bought buildings during the pandemic, those are the clients that are adding multiple team members and having 100 times return on their investment.
Oftentimes, people who are looking solely at the budget may intellectually understand that there is something to be considered beyond the budget, but they don’t always get there. You can.
If you do nothing other than invest in the possibility of something for yourself, the possibility of more clients, the possibility of more money, the possibility of more prestige, the possibility of a greater outcome for a client, do that. Even if the budget says no.
And that doesn’t mean that you do this all day, every day, right? If you completely jettison your financial plan and have no regard whatsoever at some point, you can create some catastrophic events in a business.
The goal is to consult your financial plan, but also give real weight to the promised ROI – more money, more happiness, more stability, more time – on the other side of the investment.
3. You have to cultivate faith in yourself as a business owner
A lot of business owners who cling to their budget as a guidepost for what they’re “allowed” to do haven’t cultivated faith in themselves as a business owner yet.
I remind my clients all the time that this really is their business, not their CFO’s business, not their bookkeeper’s business, not their accountant’s business. Right? They’re there to advise you, but just as you must turn to a multitude of advisors to have the life that you desire, you similarly have to have a multitude of advisors to have the financial success that you desire.
When your financial person says you can’t afford X, and you listen, that usually means that you’re going to continue to do what you’re doing now. Growth will be slow, step by step. It could be 10 percent growth, 15 percent growth, 20 percent growth, year over year.
OR, you could grow by 100 percent if you make the investment in X they said you can’t afford. What’s required is your faith in your ability to put in the work and achieve that ROI. The ROI that is based on the person you will become, not the person you are now.
We’ve had clients that join Law Firm Mentor and literally grow by two or three hundred thousand dollars in a year, and they pay less than 10 percent of that for the service that ultimately cultivated in them the know-how, as well as the dedication and accountability, that was required to get them the hundreds of thousands of dollars more in a year.
When you practice the art of cultivating faith in yourself, it allows you to say, I have a budget, which is one of the things that I consider. But I also have an abiding faith in myself, which allows me to consider that if I want to create something, I can absolutely do that.
With an increased faith in yourself, if you find a resource to help you achieve X, Y or Z, you can confidently step into that, knowing that you’re going to get a return because you’re going to put in the work to get yourself to the other side.
Want help in becoming more decisive in general? Check out this episode of the Crushing Chaos with Law Firm Mentor podcast.