Mastering a Money Mindset

From the Founders' Desk
When I was first asked by Future Females to speak at one of their events I, of course, said that it would be an honour and that I would love to. And then they sent me the topic – which terrified me. Which got me thinking about what is it about the topic that I find so scary?

And it’s as simple as money is an uncomfortable topic to talk about. No one wants to talk about money – it’s awkward, it’s uncomfortable, it’s vulnerable. But the key to having something like a word or a topic lose its power is to speak about it. And in turn, getting educated around money and the financial side of owning a running a business will empower us and further disempower the word or the topic or the fear.

…money is an uncomfortable topic to talk about.

So I was really uneducated around money when I started my first company. I had no formal training, no degree, I have no MBA, I’ve never studied financial management or business management. And I started a cosmetic distribution business, which I also knew very little about – I knew nothing about cosmetics, nothing about distribution, and nothing about owning or running a business. But I was hungry and I was committed and I was super driven. I was constantly chasing the sale – trying to secure new deals with brands, trying to get new listings, but the thing about building a financially sustainable business is that it takes time and patience, two things most young startup founders feel like they’re severely lacking.

But take that time – it is worth it in the long run. Ask for help, read books, study case studies. Get a mentor – I have a few who are all skilled in different areas of my businesses, and they are lifesavers. It doesn’t have to be as formal as “will you be my mentor”, but it can’t be your friends. It cannot be peers – it has to be someone older, with more experience, and who won’t be afraid to tell you the cold hard truths when you need to hear them.

Which is what I needed, but didn’t have at the time but now wish that I had. I didn’t know how to cut a distribution agreement, I didn’t know how to negotiate reasonable margins when securing a new listing, and ultimately I struck bad deals for the sake of getting the deal. That was actually all fine – it worked for a while because we were doing the turnover and we were growing. We grew the team, we grew the space, we grew our infrastructure, and in turn our overheads grew which is when I finally started to see the danger of poor margins, and fundamentally our lacking profitability. Nothing will sober you up like not being able to pay salaries! This was all towards the end of year 3.

And it was around this time that it occurred to me that my job was no longer the fun stuff – my job was no longer playing with makeup or selling the brands to new clients or pitching to international brands. My job was the money. And I had to learn about cashflow forecasts and projections and targets. I had to completely shift my mindset. I had to adopt a money mindset, and learn a bunch of new skills. At the same time, as a company it was time to scale and pivot and early on in year 4 we were offered a great deal with a new brand. The margins on offered met our new minimum viable margin – now that I knew what that meant – the jurisdiction options were better, and altogether its was a very attractive offer. So we took. It meant giving up our top performing brand, another tanning brand but exclusivity clauses meant we couldn’t represent both. So I took a risk. And it was a decision that ultimately led to the collapse of my business.

Which was ok. It didn’t work out for supply reasons, which I won’t go into now, but one of the most valuable things I got from the experience was the importance of a knack for negotiating. Sheryl Sandberg has literally dedicated a whole chapter in her book Lean In to this topic, and for good reason. As women, we are not good negotiators – and there is data to substantiate this – because we are inherently conditioned to fight for the collective, not for ourselves. We are nurturers. And what’s worse, is that it has become socially unacceptable for a woman to fight for only her own benefit in the workplace. So what Sheryl Sandberg talks about is learning how to negotiate in a way that speaks to the communal benefits affected by your improved state or working conditions. It is one thing to know how to negotiate, but it is another to be willing to or comfortable enough to and this comes back to having a money mindset and being about the money and understanding your value.

So while I was cutting the deal with the Italian tanning brand, I was also negotiating a deal in a personal because I was offered part ownership and profit share as the managing partner in the brand. And I didn’t negotiate it well. I sold myself short because I wasn’t comfortable asking for what I wanted. I felt like I was being offered such an amazing opportunity that I didn’t want to risk them taking it to someone else. But the problem with negotiating poorly is that you eventually end up feeling disenfranchised. You can work at something for a while with a lesser return than you deserve but eventually – if you’re human – you will become disenchanted and you will stop giving your best work, and as career-centric people, that’s just not good enough for us. It is critically important to your financial state and for the future of your career perfomance to understand your worth from the outset and not be afraid to ask for it when you go into a negotiation.

The same value principles apply when asking for funding. You have to believe enough in what you’re selling to ask someone to invest their hard-earned cash in it.

My first business was self-funded so we never had to cross this bridge. My second business, an underwear company called Something Sassy, is investor-funded. And not only do you have to have a knack for negotiation, but I think it goes without saying that you really need to have your financial ducks in a row before going after funding. The startup industry and the venture capital industry is highly male dominated industry. Think about a room full of men and someone like me coming in and talking to them about something they know nothing about. You need to have a ton of data and a ton of numbers, and really know your shit when it comes to the money. You have to make it really clear why your bras are better than the bras down the street with numbers.

We are currently in our second investment round, which is a super exciting place to be, but I am still learning a ton of stuff everyday and forever tapping into new levels of fiscal knowledge and skills that I didn’t even know existed. And I have learnt every step of the way, but I do want to share a particular conversation I had very early on in the Something Sassy journey which changed the way I approach money within this company.

Once again, I started this business with zero training or experience in the clothing or textiles industry so I took the time to put a together a network of resources willing to help me when I needed. And one of these people is a man called Rory, who is one of the owners at Sissyboy, a very successful South African clothing company. One of things Rory said to me in one of our early meetings was never, ever take the first offer when dealing with suppliers. Haggle, haggle, haggle, basically.

An example of this was when I was negotiating our CMT costs. The production team we were working with was trying to charge us exorbitant prices for our CMT work, and because we were a new company and new to the industry, basically with no point of reference. If I hadn’t been in a money mindset at the time, already thinking about the long-term future of the company, I probably would have gone with them and their absurd pricing. I was eager to get on with it, and I wasn’t sure how I was going to find someone else, or if it would even be possible to find someone else so it took everything in me to turn them down. But I pushed back, and they told me I would never find someone to do the work at the rates I wanted. Their solution was that we increase our retail price to make our margin. I knew that would never work. One, we would be pricing ourselves out of the market. And two, costs that high would not support our wholesale business model – our margins would be too low. This is why having shareholders and investors to bounce stuff off so valuable! I tap into tat resource all the time. In the end, we found a CMT willing to do the work within our budget and we now have a watertight business model.

There are several take homes from that story – get a mentor. The second, be about the money and push for what you believe is both possible and necessary.

I get that peddaling away at your dream and marrying that with being stringent about money is difficult. It is difficult to ask for what you want and risk not getting it when actually you would do the work for nothing because it is what your passionate about. We have this problem often at Coco Creative. I am lucky enough to be a co-owner at a creative agency, and naturally, in an office full of creatives, we are frequently torn between a client’s budget and the inherent desire to go full creative with a brand or product launch. It’s what we’re passionate about.

I am also acutely aware of the fact that somewhere along the line we became conditioned to believe that as long as we’re chasing our dreams the money shouldn’t matter – that if we’re doing what we love then that’s enough. Now, for me, that’s all very romantic but that doesn’t pay the bills. And that is an attitude that’s inherent in me. Yes, I had to get educated about how to manage money and about how to plan financially, but I have always been about the money. Which in and of itself comes with a certain amount of shame – I struggle with it a bit. At times I feel really selfish, I feel money hungry, but what I have learnt is that as business owners and startup founders and entrepreneurs, it is our job to watch the money. There is no shame in that. At the end of the day, when it comes to the profitability and financial viability of your business, the buck stops with you. The health of your relationship with money is entirely up to you, and it goes hand in hand with your success as an entrepreneur or a business owner.

You know, we’re all here because we believe that women should do more and be more and have more, in business particularly. But it is one thing to preach these things and believe in them, but what is each one of us actually doing to get better. To get better at your job, to get better at understanding every aspect of your business, especially the financials, to get as good as your male counterparts.

It is time to step up our careers, to ask more questions, to read more books, to get as good as our male counterparts and to start breaking those glass ceilings.

So if there are two things I can leave you with for getting better at mastering a money mindset, without getting a formal education, it’s get a mentor and ask questions, and read more books about business and then ask even more questions.

And please feel free to get in touch with either of our Coco Creative founders if you are looking for start-up support, advice or just to chat about your business 🙂

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Comments (2)

Thank you for this post. I am about to embark on an idea to business journey so this is very helpful. It gives me something to think about before I go into negotiations.

Excellent news! Good luck 🙂

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