People trading money in exchange for goods and services is said to go as far back as 650 B.C. when the Lydians created gold and silver coins. What’s less understood is how well the Lydians kept track of their newfound finances – a dynamic that’s still widespread today. In fact, in July 2022, the percentage of people who report feeling financially well dropped to a 5-year low of 44%. Thank goodness for Financial Wellness Month.
It’s no coincidence that Financial Wellness Month takes place in January. It’s the time of year when the holiday-spend hangover collides with good intentions baked into New Year’s goal setting, driving more people to seek better control over their finances. Financial Wellness Month is also an opportune time for health and wellness practitioners to take a deeper look at the financial health of their businesses, identifying any watch-outs, streamlining spend, and setting themselves up for long-term success.
You don’t have to be a finance expert to get started. We’ve got you covered with summaries of 5 helpful articles focused on helping you build a financially sound business.
Why is Financial Wellness Month Important?
Focusing on wellness is a dynamic you live and breathe when coaching clients. However, if you’ve never learned how to take care of your finances, it might fall to the bottom of your priority list. This is a risky proposition. Besides the obvious impact unhealthy finances can have on the viability of your practice, research shows you could be inadvertently impacting your physical well-being too.
- Among the 85% of Americans feeling financial anxiety, 67% say it is negatively impacting their health.
- People dealing with financial stress are twice as likely to report poor overall health and four times as likely to suffer from sleep problems, headaches, and other illnesses.
- High financial stress is associated with increased risk of ulcers, migraines, heart attacks, sleep disturbances, and diabetes.
With high inflation and interest rates still rising, it’s natural to focus on finances. An annual research project that explores Americans’ attitudes and behaviors toward money and financial decisions found that proactive planning is up. The pandemic has promoted 83% of people to either create, revisit, or adjust their financial plan. North of their border, 8 out of 10 Canadians say they’re paying close attention to their finances on a regular basis, and more than half claim they need to get a better handle on their financial situation. Financial Wellness Month marks a perfect opportunity to join them.
Is it Time to Redefine Your Relationship with Money?
There are many factors that can both consciously and unconsciously shape one’s relationship with finances and money. For example, if you grew up in a household where your parents argued over finances a lot, you might start feeling stressed when the balance in your bank account falls beneath a certain threshold. Or perhaps you were raised to believe that wealthy people got rich because they are cut-throat and overly ambitious. In that case, setting big revenue targets might cause some cognitive dissonance if you identify strongly as a helper and healer.
These types of beliefs are called “money scripts” and you may not even be aware of how yours are influencing your behavior. The trouble is, these deeply embedded scripts can seriously impact your relationship with your finances, causing you to make emotional purchases, undervalue your services, or even have difficulty following up with clients who are delinquent in paying for your services.
Financial Wellness Month offers a good excuse to shine a light on your relationship with money and finances. Asking yourself some pointed questions is a smart place to start:
- Do you find yourself worrying about money a lot of the time?
- How carefully do you track your expenses?
- Have you created a budget for yourself and do you stick to it?
- Do you feel guilty when you spend money, even if it’s warranted?
- Does talking about money make you uncomfortable?
By unpacking your attitudes towards money you can flip the script and begin a fresh relationship with your finances. Ideally, you shouldn’t view money as either “good” or “bad”. Rather, it’s a tool for helping you meet your needs and achieve goals.
Checking In on Your Business’ Financial Health
Information is power. Knowing more about your finances is the path to feeling in control and setting priorities can help you let go of residual guilt or stress. In your personal life, you’re apt to consider things like investing in retirement vs pouring dollars in home renovations to boost the value of your property, or saving for vacations vs channeling more dollars into paying down debt. Wherever your priorities lie, writing them down makes it easier to assess the long-term impact on your financial health and stability. Interestingly, research shows the pandemic rewrote how people were spending and saving their money and they expect to carry those priorities forward into the future.
Mapping out your business’s financial health is no different. For example, you could have a goal to open a second physical location to serve more clients or, conversely, you might want to take your practice entirely virtual and eliminate hefty property rental costs. You’ll need to consider some key questions in order to refine your list of priorities:
- Do you know how much you made last year? Gross and net?
- What are your financial goals for this year? How much do you want to earn?
- Is your revenue goal realistic given the services and programming you have in place? If not, what needs to change?
- How’s your business administration health? How much did you invest in running your business last year?
- Did you get the return you expected on your investment? If not, any idea why?
It can be overwhelming to know where to begin, so we’ve compiled a list of 5 helpful financial wellness articles you can check out to get started.
1. Get Your Business Financial Health Checklist
There’s little value in comparing your business to anyone else’s. Even if there’s another practitioner whose success you admire, they could be putting in so many hours to achieve their financial goals that they’re on the verge of burnout. Make sure you stay away from the comparison mindset and work on defining what a healthy business looks like to YOU.
The QuickBooks blog provides a checklist for small businesses that’s packed with advice for ending the year on a high note (although many of the recommended activities are things you can be doing all year round to optimize your business’ financial health).
Here’s why we like this resource:
- It organizes the checklist into accounting, IT, human resources, and general business goals so it’s easy to zone in on the areas that apply to you and your business administration health.
- The business financial health checklist is the most robust part of the article and covers things like running financial reports and looking at cash flow statements, with handy links to explore the areas you might not be as familiar with.
- It recommends updating your business goals, which is an important component to future proofing your practice.
- The article also advocates auditing your website, which is key to understanding how your clients – and future clients – experience important touchpoints with your brand. What impression do you make on new visitors? Is your site easy to navigate? Are all your services up to date and easy to find/book? Is it mobile-friendly? Taking time to navigate your website through the eyes of your users is a great way to uncover and eliminate friction and increase conversion.
2. A Panel of Financial Experts Outline Essential Activities for Every Small Business Owner
Financial Wellness Month would be a lot easier to navigate with a panel of experts on your side. Luckily, this Forbes article delivers. It takes a crowdsourcing approach, curating insider advice from the esteemed members of the Forbes Finance Council on how to set the right financial goals for the year ahead. The result is a thorough business financial health checklist you can use to guide your own activities.
Here’s why we like this resource:
- Tax write-offs help you keep more of your hard-earned money. This article is a good reminder that strategizing the timing of your expenses can accelerate your tax write-off by a calendar year (e.g., paying for ad spend by the end of December instead of the first week of January means you reap the tax benefits much faster).
- The article reminds us that inflation isn’t going away any time soon. After operating for years in a low-inflation economy, you need to factor inflation into both your expense equation and your revenue forecast for solid future-proofing.
- There’s great advice around understanding your profits and losses and the benefit of having extra cash flow and an emergency reserve for unanticipated needs.
- One way to keep more of what you earn is to reduce expenses. This article advocates exploring tax write-offs and investment opportunities, as well as bringing in outside help to review all the numbers.
- The experts go beyond recommending a cash flow forecast strategy to champion identifying where cash flow was weak in the past year. For example, if your cash flow slows to a trickle in July and August when clients are in summer vacation mode, you can make a plan to compensate for the shortfall, perhaps by introducing a passive income stream that’s less reliant on 1:1 visits.
3. Financial Wellness Tips for Small Business Owners
Another helpful resource to consult when creating your business financial health checklist comes from Business News Daily. It’s written specifically for small business owners who seek advice on managing their company’s finances.
Here’s why we like this resource:
- Right off the bat, it acknowledges that small businesses are successful because of the skills their owners bring, not because they are financial wizards. This means all the guidance in the article is grounded in empathy for finance newbies.
- It advocates setting aside regular time to review and monitor your books. Even if you’re working with a bookkeeper, staying in the know protects you from wasteful spending and even potential financial crime.
- As a health and wellness practitioner you know how important habits can be to driving successful outcomes. The article leans into that narrative, recommending setting up good habits around keeping up with your finances and establishing protocols.
- Finally, the article underscores the value of having a solid billing strategy to ensure you don’t have too much cash sitting in unpaid invoices. We couldn’t agree more, which is why the Practice Better platform makes it easy to automate payments and create flexible payment options for clients, so ensuring a healthy cash flow demands much less of your time and energy.
4. Review Your Insurance Plans to Ensure Your Business Is Properly Protected
Having the right insurance is critical when you’re running a small business, otherwise you can end up paying out of pocket if things go wrong. You should be regularly reviewing your insurance – what you have and what you need – especially if your situation has changed. For example, if your business has grown more lucrative you may need to update your liability coverage or you’ve shifted to fully remote and don’t have office space any longer perhaps you can cancel your content insurance.
Depending on your business model, there are different types of insurance you will need. Here are a few to consider:
- Content insurance protects your business property from things like loss, theft, fire, and floods. If you’re running a practice in an office space with a significant investment in computers and other infrastructure, this is something you may need.
- Business liability insurance protects you in the event your practice is deemed to be legally responsible for injuries to one of your clients.
- Medical malpractice insurance protects you against claims related to allegations of misconduct, negligence, errors and omissions, and equipment or treatment-related injuries. Investopedia has a best-of list for medical malpractice insurers if you need to consider this option. Note that if you’re running programs you may need separate insurance from your clinical practice, depending on your profession. Check your local legislation or seek legal advice to be sure.
- Critical illness insurance can protect you from the revenue interruption associated with a serious illness that prevents you from working.
- Life insurance for small business owners not only protects your loved ones and dependents, but can also come in handy to cover tax liability at death or even provide leverage as loan collateral.
5. Set New Year’s Resolutions for Your Healthy Business
With Financial Wellness Month falling in January, it’s tempting to set resolutions for your business. However, without goals in place to support those resolutions, you’re less likely to succeed.
If you haven’t set your business goals for 2023 yet, our article on setting business goals is chock full of tips – plus a bonus goal-setting worksheet. BDC has also written an insightful piece that includes 12 New Year’s resolutions for leaders who want to build a healthier business.
Here’s why we like this resource:
- The recommendation to set up an advisory board is solid. Having trusted advisors in your corner not only helps you avoid tunnel vision and make better decisions, it may just help to solidify your competitive advantage. According to BDC, only 6% of entrepreneurs have an advisory board in place. It doesn’t have to be expensive – your advisors can be peers, acquaintances with business acumen, or anyone whose perspective you respect and trust.
- Getting your business processes down on paper is also noteworthy advice. Not only does recording processes free you from having to micromanage or be involved in too many things, it eliminates the owner-as-bottleneck dynamic that so often stalls business growth.
- Finally, with each of the 12 resolutions in the article, BDC includes a link to learn more, making it a resource that keeps on giving for small business owners.
Focusing on financial wellness is time well spent
Financial Wellness Month isn’t about getting intimately familiar with financial terms and concepts. Rather, it serves as a reminder to focus on our overall financial wellbeing. When you have a solid understanding of your attitudes towards finances, how funds flow in and out of your practice, and your overarching goals, you can make financially responsible decisions that protect the long-term health and viability of your business.
Practice Better is the complete practice management platform for nutritionists, dietitians, and wellness professionals. Streamline your practice and begin your 14-day free trial today.