Profit Minded

Entrepreneurs and money: Is your relationship healthy?

Women entrepreneurs often dislike discussing money, says business coach Linda Tomb

Business coach Linda Tomb takes a three-step approach to helping women entrepreneurs find startup success. Once she has helped her clients get control of their time and sharpen their focus, Tomb turns to their relationship with money.

"Your relationship with money is the relationship you'll have the longest," Tomb tells entrepreneurs. "Unless your business is really just a hobby, you must take a good look at how your business will make money."

It might seem like obvious advice for anyone trying to start a business, but Tomb says many women she works with do not like to talk about money. And yet, at her speaking engagements, everyone has questions about money. So, Tomb pays special attention to the topic with her coaching clients.

Be able to explain your business
First she tells women to hone their approach to the outside world. "If you're going to make money doing something, you have to be able to explain what you do," she says. "It's astounding to me how many people think they're going to make money when they can't describe what they do."

She says every entrepreneur needs to know exactly what they'd say to a potential client who asks, "So, what do you do?" It can be difficult to describe in a compelling way what you do, Tomb acknowledges. She asks her clients to find a way to explain it in 10 words or less with emotional appeal.

Beware of using too much "process language" she says. "This customer is in pain and wants to know how you're going to help them. What problem are you solving? What pain are you easing? What pleasure will they get from you by working with you or buying your product?" A good businesswoman also needs to be able to explain what makes her unique. "What sets you apart from your competition?" Tomb asks.

Know where your business is going
Once you can explain to the outside world what you do, clarify your internal elevator speech about where you're going, Tomb says. "Many entrepreneurs start a business without being sure where they'd like to go with it. If you are going to make good money doing this thing, you need to be clear about what you want, and where you want to go."

For instance, Tomb says, ask yourself what specific measurable results you want to happen and by when. "What's your vision? What's your definition of success? Who is your client? Whom are you serving?" Tomb suggests charting your course for a set initial period, such as from now through Christmas. Tell yourself, "By year's end, this is what I want to happen in my business."

Have the money conversation
Those steps, she says, "are the preamble to the money conversation." To entrepreneurs who dread that discussion, she warns, "You have to talk about money if you're going to make money!" Many otherwise savvy women have uneasy relationships with money she says. They can be fearful, neglectful, guilt ridden, abusive—she's seen it all. Tomb asks clients to reflect on what their attitude is toward money, understand where it comes from, and consider how to adjust that.

And then she asks them to be honest about how their business is going to generate money. "The entrepreneurial graveyard is littered with great ideas that no one figured out how to make money doing," Tomb says. "You might have a great business idea, but whether you make money is going to be all about execution."

She says it comes down to answering a basic set of questions:

  • What's your market?
  • How big is your market?
  • What are the trends in this market?
  • How are you going to market?
  • What's your business model?
  • Are you going to package this?
  • What will you charge?
  • How will you price your services?
  • What will people pay?
  • Are you seeking investors?
  • Will you ask friends and family for funding?
  • What are you going to spend on launching your business?
  • What are your assumptions?

Be realistic, Tomb says. "Do you know how many people think they're going to make money through web advertising?" And, she adds, get serious. "Plan to invest in yourself and in your business," Tomb says. "If you do, you will take yourself more seriously. You will work harder when there is money on the line."

For more reading on starting a business and establishing a healthy relationship with money, Tomb recommends the following books:

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