Episode 3: Connecting the Dots Between Profits and Stress

There’s a strong correlation, perhaps even causation, between your profitability and business stress. And so, if you’re suffering from business anxieties the solution is not a better portfolio, but rather fixing your bottom line.
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Are you ready to take the struggle out of finding new clients?

As a creative entrepreneur you’re probably more focused on your book of work than on your bookkeeping. As a result, you’re failing to observe some important connections between business profitability and personal stress. If you’re not following the trend lines of your net income, then you can’t see how those ups and downs likely correspond to increases in stress that you perhaps connect to other causes.

Rather than noting that your net income on your profit and loss statement is dropping, instead all you feel is the pressure to need to complete an overdue assignment. Rather than observing a flat or declining total equity of your balance sheet, you just know how desperate you are to collect on a new invoice, so you pay overdue bills. Rather than seeing a negative trend in your cash flow spreadsheet you just feel crushed between competing time demands—working nights and weekends to catch up.

You try to keep all the plates spinning, but sooner or later they come crashing down.

Lack of profitability in creative service businesses is most often felt, not directly as financial pressure, but rather as time pressure. But what if you could see the direct connections between time pressure and financial performance? What if you knew for sure that if your profit margin were to go up, your time pressures would go down? What if you could feel in your bones how a rising total equity on your balance sheet results in less clamour, less anxiety, and more free time?

If low profitability is connected to less available time, and more profitability results in greater freedom and control over your time, wouldn’t you be more motivated to give attention to your financial reports?

Of course, just looking at your numbers is not going to solve the underlying problems that may be causing unprofitability. It will take more work to move your net income up and increase your total equity. But when you start to correlate these two things, connecting the dots between profits and stress, you will at least become more motivated to get these numbers moving in the right direction!

And when you start looking at, and listening to what your money is saying, you’ll start to pick up clues about what needs to be fixed or improved. As you continue to examine trends, and implement changes you’ll begin to see the needle moving in positive directions. And your stress level will drop in proportion to improvements in your bottom line. Being able to quantify concretely the impact of these changes, will build hope for even more control and stability in the future. Hope that will further motivate you to improve. This changes the downward spiral of stress into an upward and positive cycle of enjoyment and control over your work.

There are many practical steps that you may need to take, and changes to implement, and we’ll discuss some of these in upcoming episodes, particularly when we start talking about measuring and monitoring your minutes, in addition to your money. But for now, just carve out a bit of time from your busy schedule to review your basic business financial reports. The first step is to see the connections. Then you can start down the path of fixing the problems.

So until next week: don’t let the business of creativity overwhelm your creative business.