Entrepreneurial success: overcoming negative money Mindsets

Every entrepreneur and business owner can probably attest to the anxiety that results from trying to pay salaries and suppliers at the end of the month. File image.

Every entrepreneur and business owner can probably attest to the anxiety that results from trying to pay salaries and suppliers at the end of the month. File image.

Published Jun 17, 2024


Many people have an unconscious bias about money, with the result that they find themselves trapped in a scarcity mindset based on the belief that ‘more’ is better. However, numerous studies point to the fact that once our basic needs are met, more money buys diminished incremental returns on life satisfaction.

Rather than how much money we have, satisfaction comes from having a healthy relationship with what money we already have.

Not surprisingly, this same unconscious bias, often laced with fear and false beliefs, is also prevalent in the business sector.

Catherine Wijnberg, founder and CEO of Fetola, an enterprise development organisation that helps South African businesses grow, create jobs, and contribute to social and environmental change, says she frequently observes how hard-working entrepreneurs unconsciously self-sabotage their success with a lack of self-belief.

“As a leadership development specialist working with hundreds of entrepreneurs each year, I have long been conscious of the emotional aspect of people’s relationship with money. Much of the problem relies on our historical and cultural relationship with money. If we grew up surrounded by the belief that money is the ‘root of all evil’ then it’s not surprising that we subconsciously push financial wealth away, despite striving so far to achieve it.”

Marc Johnson, founder of It’s a Breeze and facilitator of the Colour Accounting Financial Literacy workshops for entrepreneurs across the continent and internationally, said, "Unfortunately, negative early experiences with maths and accounting can lead to lifelong anxiety, impacting business decisions and leading to avoidance of crucial financial activities."

Every entrepreneur and business owner can probably attest to the anxiety that results from trying to pay salaries and suppliers at the end of the month when there are cash flow issues. When the pressure gets too much, business owners may be tempted to switch off their phones and ignore emails demanding payment, essentially trying to ignore the problem. However, Wijnberg says, this can have disastrous consequences including eviction and even business failure. It also impacts on the long-term reputation of the business.

“In contrast, the emotionally and financially confident entrepreneur is able to see the bigger picture,” she explains. “He or she will call the landlord or supplier to agree a rescheduling of the payment so that the problem is in the light and a shared solution is created.”

The SAB Foundation, an independent trust that invests millions each year to develop entrepreneurship in South Africa, highlights financial readiness as one of the biggest weaknesses in the country’s small business sector.

Bridgit Evans, the Head of the SAB Foundation says the money beliefs and behaviours held by business leaders impact both the way they manage money in their personal lives as well as in their businesses. “How we feel about money subconsciously influences our default behaviours and financial decisions. For example, if an entrepreneur has a scarcity mindset or an abundance mindset or is a cautious spender or a big spender, these attitudes and beliefs will inevitably show up in their everyday business decisions.”

Awareness is key to dealing with unconscious bias, says Evans. “When you are able to unpack and better understand your attitude to money and how it manifests in your daily life, you are better able to avoid the common mistakes people make when they don’t have a healthy approach to money.”

Fetola and the SAB Foundation have been working closely together on strategies to improve financial readiness, which includes teaching entrepreneurs how to develop a healthier relationship with money. The Money Magic Journey component of the Tholoana Programme, an 18-month business accelerator, starts with a workshop called ‘The emotions of money’ where participants spend time reflecting on understanding their long-held beliefs about money.

“We start by helping entrepreneurs to recognise how past experiences and family beliefs affect their relationship with money. This is the starting point to decouple negative emotions around money from good personal and business financial decisions. The next step is to increase their self-confidence with financial management through improved understanding of accounting and strengthened financial management skills,” says Wijnberg.

The result, she adds, is an increase in confidence, an improved working experience, better decision-making and longer-term business success rates.

Entrepreneurs who have participated in the workshop say it fundamentally changed their mindset about finances and bookkeeping. “I’ve always had a complicated relationship with money but now I clearly understand what needs to be improved,” said one entrepreneur.

To learn how to decouple your emotions from financial decisions, master your money and unlock your growth potential, don’t miss Fetola’s next free online webinar “The Emotions of Money for Small Business” at 13:00 on Wednesday, 5 June, Marc Johnson will be the guest speaker, click here.

Entrepreneurs who are motivated to succeed in business are invited to contact Fetola to join their waiting list and be the first to hear about upcoming accelerators, including the SAB Foundation Tholoana Programme. The Tholoana Programme has been accelerating the growth of South African entrepreneurs across the country for more than a decade.