If you’re tossing and turning at 3 a.m. every night worrying about your business bank account, you’re not alone. An astounding one-third of Americans surveyed by GoBankingRates admit they worry about money all the time.
While this poll wasn’t specific to entrepreneurs or small-business owners, there are plenty of reasons why entrepreneurs might worry about money—after all, the monkey's on your back when it comes to keeping your business in the black.
But as a small-business owner, you also have a choice: You can let those money worries hold you back, or you can choose to deal with them and even use them to motivate and inspire you.
Here’s a look at five of the top money fears you might be struggling with and how to turn them into a positive force.
1. Living Paycheck to Paycheck Forever
This was the top money-related fear in the survey. Of course, as a small-business owner, this fear probably hits closer to home. During tough times in your business, you might have had to reduce or even eliminate your own paycheck. Perhaps it’s been years since you’ve given yourself a raise.
- Potential solutions: Set up a retirement account, and contribute something to it, no matter how small. Even if you run a one-person business, you can set up an IRA or even a 401(k) especially for solo entrepreneurs. The sooner you start, the more your savings will add up.
- Use it to motivate you: As an entrepreneur, it’s easy to get stuck thinking small potatoes—that is, how you’re going to get through the next day, the next week, the next payroll. Use your fear to motivate planning a big-picture future, with your eyes on developing enough cash flow to retire or at least step back a bit from your business some day.
2. Falling Into Serious Debt
This was the second-biggest money worry in the study. While fear of personal debt may be sensible for individuals, for entrepreneurs, being too scared to take on debt to grow your business can hinder its potential.
- Potential solutions: When faced with a business opportunity that requires more working capital than you have, investigate ways to finance what you need. There are all kinds of options, from using business credit cards or taking out a business line of credit to purchase order financing, merchant advance financing or finding an alternative source for a loan. Just be certain the payoff is worth the cost of taking on the debt.
- Use it to motivate you: Focus on the opportunity (not the debt), and develop a clear plan, including financial goals and projections, to make the most of it. Thinking this through could not only help you obtain financing from lenders but will also ease your worries by giving you a road map to success.
3. Becoming Homeless
Tied with the fear of debt was the fear of becoming homeless. Not to minimize it, but for most of us, this really isn't a realistic concern (though I did just hear about a young, now successful entrepreneur who lived in his van while starting up). You likely have an emergency “crash pad” available to you until you could get on your feet again.
- Potential solutions: Try not to live above your means. The feeling that you must keep up with the Joneses prompts many entrepreneurs to spend more than they make to create a “front” they believe reflects their business success. Instead, be like The Millionaire Next Door. The eye-opening research in this 1998 book found that most millionaires aren’t flashy—they live quiet lives in modest homes, drive older cars and invest their money wisely.
- Use it to motivate you: Facing your fear can sometimes help. Get involved with a local organization to help the homeless. Better yet, get your business, employees and customers involved. You’ll help others and build bonds in the community.
4. Paying the Bills
What financial-related tasks do people fear most? This one's in the top spot, at 30 percent.
- Potential solutions: The unknown is often worse than the known. Don’t stick your head in the sand and put off paying your bills, even if you're worried you won't be able to cover them all. Use your accounting software’s cash flow management tools to keep on top of what you owe and when you need to pay it back so you can keep the cash in your account as long as possible without paying late.
- Use it to motivate you: Know your monthly nut to the dollar, then stay on top of your cash flow and use it like a scorecard. Think of it like a salesperson who strives to surpass their quota by more and more each month.
5. Asking People for the Money They Owe You
Next on the hated-task list was “asking people to pay you back.” Unlike most people, entrepreneurs do this all the time! No wonder we lie awake all night.
- Potential solutions: Accounting and invoicing software can track when payments are due, then reach out immediately when a bill is late. Create templates you can use to send standardized reminders, plus scripts for calling in person when the situation gets dire. By treating the task as what it is (business, not personal), you can take the emotion out of it.
- Use it to motivate you: Got customers who regularly take advantage of you by paying late—or not at all? Focus on how good it’ll feel to get rid of them, and use that energy to concentrate on finding new, more trustworthy clients.
Read more articles on financial management.
This article was originally published on October 6, 2014.