How to Build Money Confidence as a Service-based Business Owner (2024)

How to Build Money Confidence as a Service-based Business Owner (1)

15 October 2020 | How to Build Money Confidence as a Service-based Business Owner (2) by Gina Lucia

Freelance and service-based business owners need to wear many hats. We have to find work, keep up with that work, market our own businesses, keep up with training, and so much more.

Throw into the mix, managing our own business finances, and things can get pretty overwhelming. It doesn’t have to be though.

So in this article, I’m going to share with you seven of my best tips on how to gain money confidence as a freelancer. From converting sales to managing where your money is going.

Building money confidence

Visual learner? Watch the video:

Tip #1: Get a business bank account

When I first started with my freelance business, I kept all my money in one account. I had my business incomings and outgoings completely mixed up, with my general life expenses.

I put off getting a business account for years, based on two things:

  1. I didn’t want to pay a bank service charge for accessing my own money.
  2. I wasn’t earning much at the time, so I didn’t want a reminder of how little I was earning.

All this decision did though, was hold me back from fully grasping my business finances. I had no idea what was going out, and I was turning a blind eye to the little money that was coming in. I had absolutely no money confidence.

The idea that six pounds a month business bank account charge was too much for me to pay, should have been a big red flag that something needed to change. If I couldn’t afford £6 a month, something was very wrong with my business.

When I took the leap and got a business bank account, here’s what happened:

  • My mindset changed, and I felt more like a proper businesswoman. As silly as that sounds, it was true.
  • I could see what was going out and coming in, more clearly.
  • It made me realize that I needed to be more proactive with my business if I wanted to see results.

Tip #2: Track your income and expenditure manually

This may seem obvious, but tracking what comes in and out of your business, is truly valuable.

I struggled with the idea of managing my business finances for years because truly, I was scared of it.

Money mindset is always something I’ve struggled with. So, seeing how much I was spending in comparison to what I was earning, scared the crap out of me.

But, by not paying attention to the money I was spending in my business, I was stopping myself from progressing. If I couldn’t see how I was doing, how could I possibly know if I needed to acquire new work to help me out? Or if I had the spare money to invest?

Something changed for me one month when I decided to work on my money mindset. I decided to jump in at the deep end and stop manually recording my business finances, so I could truly see what was going on.

I signed up for Wave, which is free accounting software, you can use to manage the income and expenditure of your business. And, it also helps the taxes.

How to Build Money Confidence as a Service-based Business Owner (3)

I set a date in my calendar every single month, to manually input my income and expenditure into Wave. And, the great thing about Wave is that you can see all of this in the form of pie charts and graphs, so you can fully grasp how much you’re spending on your business each month.

It goes without saying that, although some months during this were painful. Over time it allowed me to get a better grasp on my business and take action, to make improvements going forward.

If you want to have money confidence, especially in your business. I highly recommend taking this step and tracking your income and expenditure manually.

Tip #3: Talk sales with confidence

The number one thing I struggled with when starting out freelancing, was talking about price and asking for the sale.

I believed people wanted to work with me because I was and still am, personable, honest, and kind. However, these traits only work to your advantage up until the point of asking for the sale and telling them your price.

I struggled so much with this part of the sales process, because like it or not, us freelances need to learn one very important skill, and that’s sales.

So, when working up to closing the deal, here are some of my tips and these come from an introvert.

Don’t beat around the bush.

A client knows you charge for your services. And, they also know at some point, you’re going to tell them how much it costs.

Don’t be shy and tell them with confidence. If you don’t, your body language and the words you use will show your lack of confidence, and then they’ll stop having confidence in you.

And then instead of saying, “What do you think?” Or, “Let me know if you’re interested.” Say, “Does that sound fair to you?” after you’ve given them your price.

Trust me, it’s very hard to say no to.

Tip #4: Send invoices with confidence

Believe it or not, the sales process doesn’t stop when they’ve agreed to work with you. You need to keep that confidence going when you send the invoice.

If you’re anything like me, you do 50% upfront and 50% on completion for new clients. This means the first invoice needs to be sent before you even start work.

How to Build Money Confidence as a Service-based Business Owner (4)

So, here are my tips for sending invoices:

  • Send it with a welcome packet to soften the blow.
    • By sending your invoice with a welcome packet, you’re reminding your client why they chose to work with you and the value you’re going to provide. While also asking them to pay.
  • Use professional software.
    • I mentioned using Wave earlier, but I also use it to send my invoices. By using something like Wave, you make it easier for your client to pay you.
    • You can use templates and you can track everything, and then let Wave do all the work.
    • If you ever have trouble getting a client to pay you on time, software like Wave allows you to send reminders to clients so that they can pay on time. The best part? It comes from Wave and not you. So, you’re not doing the nagging, Wave is.

Tip #5: Put tax money away every month

I didn’t do this for years, and boy did I regret it. Instead of putting a percentage of my money away each month to pay for taxes, I completely ignored their existence. And then, when a letter came asking me to pay, I’d be completely frustrated, angry, and upset.

After all, all the money I thought I had was no longer mine.

When I decided to start putting a percentage of my money away each month in a separate account, all that money anxiety washed away.

No longer did I dread my taxes, because I was putting money away every month for them. And better yet, I was probably putting away too much, so any leftover money was a bonus.

Depending on where you live, check how much you need to put away each month for taxes, and then do it. You’ll thank me later, trust me.

Tip #6: Put money away each month for your pension

I’m not sure what it’s like where you live, but in the UK, self-employed people get a state pension. But, by the time you retire, the amount you get isn’t that much.

So while you’re working, I’d suggest getting a personal pension to top this up. Then, put an amount each month into the pension, depending on what you think you can afford. You can always change this amount, as you go.

How to Build Money Confidence as a Service-based Business Owner (5)

Essentially, by setting up a personal pension, you’re ensuring you have a financial future. Especially when you can’t necessarily control your state pension.

I’m not a financial advisor, so you’ll need to hire one or ask a knowledgeable friend or family member, to help you find the right personal pension for you.

Tip #7: Put an amount of money away each month for your nest egg

As freelancers, we can’t always control what happens to our work. Sometimes clients decide that they no longer need our help, or the world turns to pot.

So, to protect ourselves from such occasions, I recommend putting aside an amount of money each month, for your nest egg.

A nest egg, is simply a pot of money you keep aside, for the future. For your business, this will be reserved for such occasions:

  • Where clients stop working with you unexpectedly.
  • You have personal injuries that stop you from working.
  • Or something happens in your family.

By setting this up, you ensure you’re covered, because we don’t get sick pay or an employer to back us up.

I put away a certain amount of money each month for my nest egg, and I keep it separate from my business bank account.

To keep this, my tax money and other investments separated; I use Monzo and it’s Pots features.

How to Build Money Confidence as a Service-based Business Owner (6)

Monzo is an online bank, that’s designed for ease of use and has many features. In particular, I use it to separate my money out into pots. Monzo is free to use and makes managing money in this way, easy.

So tell me in the comments, do you have any tips to build money confidence as a freelancer, or service-based business owner?

How to Build Money Confidence as a Service-based Business Owner (2024)

FAQs

How to be more confident as a business owner? ›

15 Tips to Build Confidence in Business
  1. Manage your state.
  2. Define your fears with fear-setting.
  3. Launch – don't wait for perfection.
  4. Develop yourself.
  5. Take time for fun.
  6. Keep a cash cow.
  7. Talk to mentors.
  8. Do your best and worry less.

How to make money as a business owner? ›

Here are a few of the best ways to make money as a small business owner:
  1. Offer a unique product or service. ...
  2. Focus on quality. ...
  3. Build a strong brand. ...
  4. provide excellent customer service. ...
  5. Focus on marketing.
Mar 11, 2024

What is an example of self-confidence in business? ›

A few examples of self-confidence in the workplace might include the following: Always doing the right thing, despite what others might think of you. Having the confidence to leave behind what makes you comfortable to try new challenges. Identifying your own weaknesses and implementing ways to overcome them.

What advice would you give to business people to improve their profits? ›

Four ways to increase business profitability

These are reducing costs, increasing turnover, increasing productivity, and increasing efficiency. You can also expand into new market sectors, or develop new products or services.

What is the secret of successful business owner? ›

To build a successful business, you need more than a good—or even great—idea. You have to be well organized, flexible, and creative, and develop a knack for paying close attention to the details while never losing sight of the big picture. You should also be prepared to make some personal sacrifices.

How do you build self-confidence for success? ›

How to increase your self-confidence at work
  1. Attend professional development training. ...
  2. Learn new skills. ...
  3. Dress for success. ...
  4. Leave your comfort zone. ...
  5. Emulate confident peers. ...
  6. Set goals for yourself. ...
  7. Focus on your strengths. ...
  8. Learn from your mistakes.
Sep 29, 2023

How to pay yourself first? ›

What is a 'pay yourself first' budget? The "pay yourself first" method has you put a portion of your paycheck into your savings, retirement, emergency or other goal-based savings accounts before you do anything else with it. After a month or two, you likely won't even notice this sum is "gone" from your budget.

How much should you pay yourself as a business owner? ›

To determine your salary, you need to first estimate your company's annual gross revenue and subtract all operating costs, such as rent, employees' salaries, inventory and supplies. Make sure to set aside extra to cover emergency expenses or business debt, such as payments for a small business loan.

How to pay yourself as an S Corp? ›

Three ways to pay yourself: salary, distributions, or both. S corp owners who handle business operations fill two roles: shareholder and employee. But owners who don't manage daily operations are considered only shareholders. Under an S corp structure, your role directly affects your pay.

What are the 5 ways to boost your confidence? ›

To answer this, let's look at the common traits found among those who exude a sense of confidence:
  • Believe in yourself. ...
  • Know and appreciate your limitations. ...
  • Challenge yourself. ...
  • Recognize your accomplishments and the praise you receive. ...
  • Visualize a confident version of yourself.

What is a good sentence for self-confidence? ›

Her problems are her weight and low self-confidence. It just brought so much self-confidence. The intellectual self-confidence of the expert. It was all about national self-confidence.

What is the dark side of entrepreneurship? ›

Anxiety. Apart from stress, entrepreneurs have to take a lot of pressure. For example, some entrepreneurs suffer from anxiety when they find it difficult to pay their mortgage. Some of them suffer from anxiety because they are unable to spend some quality time with their friends and family members.

What are three 3 main ways to increase profits for your business? ›

The top profit drivers common to most businesses include:
  • increasing sales (turnover)
  • improving gross profit by either increasing price or reducing input costs.
  • reducing overhead expenses by improving efficiency.
Oct 25, 2023

How to increase profit margin in service business? ›

A key strategy to increase profits for a service business is to control expenses. in fact, this strategy applies to all business! Getting more control of your expenses can be achieved by cutting unnecessary expenses, streamlining your operations and negotiating better prices with suppliers.

How do small businesses make money? ›

It is typically based on one of the following broad models: Buy a product, distribute it for a higher price than you bought it for (example: luggage) Manufacture a product, sell it for more than it cost to produce it (example: picture frames)

How are entrepreneurs self confident? ›

Taking Persistent Action

Self-confidence must be accompanied by persistent action for it to be effective. Entrepreneurs must take proactive steps toward their goals, consistently and unwaveringly. Even in the face of obstacles, they persevere, finding creative solutions and adapting their strategies.

What's the hardest part of being a business owner? ›

Below are some of the most challenging aspects of being an entrepreneur, but since space is limited, the list just scratches the surface.
  • Building the right team. ...
  • Facing uncertainty. ...
  • Handling skepticism. ...
  • Feeling alone. ...
  • Facing rejection. ...
  • Lack of support. ...
  • Decision-making. ...
  • Learning to say no.
Sep 17, 2022

What makes a strong business owner? ›

Willingness to seek out and take smart risks, rather than any risk or no risk, is the mark of a top business owner. Taking risks requires making decisions and initiating action, rather than ignoring challenges or dodging decisions. In business today, making slow or no decisions leads to early failure.

Can you be shy and a business owner? ›

If you're shy or slow or both, you only need yourself to get your business going. Allocate your own resources to researching your business idea, figuring out how to bring it to the marketplace, and defining the other tools and resources you may need to help you.

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