In this episode of the NewLaw Podcast for Entrepreneurial Lawyers, Ali Katz coaches Stephanie, an entrepreneurial lawyer, through her mental blocks on investing money in her business.
Stephanie shares her fears of financial instability, despite her recent success in booking new clients. Ali provides Stephanie with practical strategies and mindset shifts to overcome her fears and set up strong financial systems. Through the coaching session, Stephanie gains the confidence to build her business credit and trust her entrepreneurial journey.
Key Takeaways:
Addressing Financial Fears: Understand that financial fears are common and can be managed by setting up proper financial systems and structures.
Building Business Credit: Learn the importance of establishing business credit early on and how it can provide a financial safety net.
Mindset Shifts: Focus on what you want to achieve rather than what you fear, and envision your success to drive positive outcomes.
Regular Financial Reviews: Implement weekly, monthly, and quarterly financial reviews to build self-trust and ensure financial stability.
Expansion Strategy: Recognize that at every stage of business growth, investment beyond current revenue is necessary for expansion.
Through Ali Katz's coaching, Stephanie gains valuable tools and perspectives to overcome her financial fears and make confident, strategic investments in her business. This episode is essential for entrepreneurial lawyers looking to overcome financial anxieties and achieve sustainable business growth.
Time Stamps
01:43: Ali invites Stephanie to discuss her mental blocks on investing and how these fears can hinder business growth as a business owner.
02:14: Stephanie describes how a slow period in business pushed her to the brink of her savings and how that stress influenced her views on investing in new systems.
03:31: Ali discusses her personal journey of facing financial fears by running out of money and realizing that survival skills and self-belief are key to overcoming such fears.
06:24: Ali suggests building financial self-trust systems to keep track of one's financial realities. These systems help in calming fears and making informed decisions.
07:18: Stephanie receives both practical and spiritual encouragement from Ali, realizing the value of her services and finding ways to stabilize her business financially.
10:27: Ali highlights that every business expansion stage requires investing beyond current revenues and that understanding and planning for this discomfort is part of growth.
11:26: Ali brings up Elon Musk's example, who had to borrow money to pay rent despite his ventures, illustrating that even successful entrepreneurs face financial crunches but continue to push forward.
Transcript
Ali Katz: At least for me, when I've gone all the way down that rabbit hole of letting my. In fact, I did go all the way down that rabbit hole. I let myself run out of money. Because my fear of running out of money was so terrifying that it was driving all of my choices. And I didn't like who I was being when that was the case, that I was like, okay, I'm just gonna do it. And I did. And I found out that no matter what, I'm always gonna be okay. Because that's just who I am.
Ali Katz: Hello, and welcome to the NewLaw podcast, where we guide entrepreneurial lawyers to build law practices into businesses they love. I'm Ali Katz. In this episode, you are going to hear me coach one of our PFL firm leaders move through her money dysmorphia, something I discovered in my own path to building a business. That is a distorted view we have of our financial reality that can cause us to make poor decisions about how we use our time, energy, and attention when we have an incredibly valuable service to offer, like you do with your law degree, if you're using your law degree in the right way. Because if you have an incredibly valuable service to offer and you keep offering it, you never run out of money unless your mind gets the best of you and causes you to focus your time, energy, and attention in the wrong places. So listen in to how I coached Stephanie on this and see if you might wake up to your own money dysmorphia and how you need to shift the use of your time, energy, and attention. And I'll see you on the other side.
Ali Katz: Stephanie, welcome.
Stephanie: Hey, thanks, Ali.
Ali Katz: So I wanted to just spend a little time with you on your mental blocks on investing money, because this is a very normal thing for everybody, I think, and also a great place to have a breakthrough as a business owner. And so why don't you tell me a little bit about what's happening? I see that you have an inner voice that's imagining the worst case scenario, that you'll invest too much, too fast and run out of funds. So tell me a little bit more about that.
Stephanie: Yeah. So I guess I'm just, as you're aware, like, the past few months were, like, really slow. I really struggled financially and was kind of getting down to, like, the very bottom of my savings, which was really stressful, you know? Now, like, I'm really happy to say, like, I have five appointments in February. I have four booked in March. So I'm just floored with that and feeling optimistic. And I know that it's time to, like, slowly start scaling my systems. But say, was, like, looking at CRMs and, like, I don't know, getting overwhelmed, I guess, with, like, oh, I don't know what to choose. What if I get this program? Or what if I hire this bookkeeper and now looking at my running list of expenses and just, like, seeing it growing, and it's like, okay, well, if I get this many clients a month, like, it won't be an issue. But I guess I'm just. I'm feeling the fear of, like, okay, well, what if all of a sudden, all my clients fall off and back to, like, the same situation of trying to, like, make ends meet?
Ali Katz: Yeah. What if? I think it is valuable to go down all the way. This is, are you familiar with stoicism, the philosophy of stoicism?
Stephanie: Not really.
Ali Katz: It could be good for you to look into. There's something called the Daily Stoic that I really like, and one of their teachings is, yeah, do that worst case scenario thinking and feel that all the way through. Like, oh, my God, what would I do? What would you do? Would you just fall over and give up? No, probably not, Stephanie. You would actually figure something out, at least for me, when I've gone all the way down that rabbit hole of letting my. In fact, I did go all the way down that rabbit hole. I let myself run out of money.
Ali Katz: Because my fear of running out of money was so terrifying that it was driving all of my choices. And I didn't like who I was being when that was the case, that I was like, okay, I'm just gonna do it. And I did. And I found out that no matter what, I'm always gonna be okay, because that's just who I am. And I found in that place. And some people, I will say some people do have to hit rock bottom in order to face that place. But that's a choice, too. Like, just make the choice not to have to get to rock bottom, right.
Ali Katz: It's way harder to climb back from rock bottom than it is to just keep facing the fear and doing the things that you need to do to keep moving towards what you want. I don't think that this is actually, at the end of the day, a fear of running out of money. You are getting intimate with money as a business owner, which is different than being intimate with money as an employee. And maybe even you weren't that intimate with money, your money reality as an employee. Financial literacy is not something that anybody's ever taught us.
Stephanie: I've always kind of been aware of my financial situation, what's coming in, what's going out. So I feel good about that. But, yeah, just kind of looking at my income and expenses on a weekly, monthly basis and just picturing the worst case scenario.
Ali Katz: Well, my guess is, with respect to picturing the worst case scenario, I mean, one thing that I know for sure is that it feels a lot better to do life and business when I'm focusing on what I want rather than focusing on what I don't want. Both can work in terms of creating the outcomes that you want. Right? Like, I graduated first in my class by convincing myself I failed every law school exam. That drove me. That fear drove me. I probably still could have graduated first in my class if I had focused on just always doing awesome and really wanting to graduate first in my class. I didn't have that tool then. I do think that this is where you do get to start to work with your mindset and say, okay, every morning I'm going to wake up and I'm going to envision x number of clients this month because you know what your goals are that are required, and I'm going to focus on serving those clients in the best way I possibly can.
Stephanie: Gotcha. Yeah.
Ali Katz: Yeah. And when your mind goes to that worst case scenario of, oh, my God, no clients are going to come in, think that you can say, well, what would have to be true for no clients to come in, what would have to be true? Well, kind of you would have had to have given up.
Stephanie: Yeah.
Ali Katz: Because every single person in your community is going to die one day.
Stephanie: Right. No shortage of potential clients.
Ali Katz: There is no shortage of clients. I guess I would go within that. Ask that worst case scenario. Ask that voice that's imagining that worst case scenario. What are you trying to tell me here? What is it that you want me to know? There's something you want me to know here. Maybe it is just that you need to build these self trust systems with that weekly, monthly, quarterly review of your financials in a way that actually allows your system to relax, and you haven't built those yet, and so now it's time to do that and then see what happens.
Stephanie: Okay. Yeah. I mean, that makes sense because right now I feel like I'm just, like, hyper alert to all of my financial ins and outs. And I'm sure that's, like, partly a control thing, but not necessarily productive.
Ali Katz: No. Well, it's literally why I created the entire money map program and all of the, you know, financial systems that we have now is because I needed them. And so if you have a weekly financial analysis happening as we talk about in the financial part of LIFT, and if you have a monthly review of your profit and loss statement, and you have a quarterly look at your cash flow forecast, to be absolutely clear on exactly how many clients you need to engage and at what average fee to hit your time and money goals, and then you're spending every day waking up, reminding yourself of why you're going to hit those goals. My guess is that some of that will be able to relax, and if it doesn't relax at that point, then there is something deeper to look at.
Stephanie: Okay, that's helpful.
Ali Katz: Yeah.
Ali Katz: Would you love direct support to help you grow your law practice into a business you love? Go to newlawbusinessmodel.com/show and sign up for a call with one of our trusted law business advisors. Each of our advisors has been trained directly by me over the past five years plus to help you chart your path from wherever you are now to where you want to go as efficiently and effectively as possible. You're ready to grow. We are here to help.
Ali Katz: Let's get the surface structures in place. The thing that's really important for us all to remember here, and I will say this through the money dysmorphia lens, is that most of us were passed on an inheritance of scarcity. It's built into our systems through epigenetics, because most of us came from an ancestry that was living in survival and that lives inside of us. And the reality is that you have a tremendously valuable service to offer the world, such that you couldn't actually run out unless you literally stopped serving people. Once you know how to bring a valuable service to people, the only way that you could run out is if everybody around you also ran out. And then we're in a much bigger problem than you run out, because you actually have the most valuable thing to offer to your community. And if you just keep offering it, you're going to find the people that need it, and you're going to serve your heart out to them and they're going to pay you.
Stephanie: Yeah, that's encouraging. I appreciate just the practical, but also kind of the more pep talk, spiritual encouragement as well.
Ali Katz: Yeah, I mean, also, Stephanie, it could be really helpful to you. And this is good for all of you a well, who are just starting out with this to remember where you were in November and December, when you were just learning how to provide this service, and you really didn't even know how to provide it, and you made it through that.
Stephanie: Yeah, that's true. I mean, the past few months were hellish, but, yeah, I'm hoping that, like, out of the woods now. And that's true.
Ali Katz: But you did it.
Stephanie: I mean, yeah. I can't imagine, like, letting, you know. Well, not letting, but, you know, if I'm at this point, like, would things really go back to, you know, zero clients for months in a row? That seems unlikely.
Ali Katz: You probably won't have that problem again. But here's what I can say, Stephanie. You will have the next one, which is where there could be a period of time in the future, and I hope that there will be for you where you have hired to expand your capacity beyond where your revenue is. And it might look and feel the same as those couple months or a few months when you didn't have any clients, because now you've got an outlay requirement that is greater than what you have coming in. Same as that. But that is what's necessary at every stage of expansion. At every stage of expansion, you are going to invest beyond your revenue that's coming in. That's part of what it takes to expand.
Stephanie: Yeah, I know it, and I know that I will struggle with it at that point as well, because it just feels so, you know counterintuitive, it's like, my survival.
Ali Katz: Yeah. When that happens, think of Elon Musk. And Elon Musk had to borrow money to pay his rent. He is now the richest man in the world, or something like that.
Stephanie: I didn't know that.
Ali Katz: Yeah. Yeah. Elon Musk had to, because he went all in on the things that he has created. Tesla, Paypal, whatever was SpaceX. But he took all his money, probably from PayPal, all his, you know, everything he'd made from PayPal. And he went all in on the next thing. Maybe that was SpaceX, and he had to borrow money to pay his rent. And, you know, sometimes that happens.
Ali Katz: But as long as you can see the future of where you're going, then it's okay. Totally okay. He has slept in his office floor before, too. He has done what he needed to do. And, Stephanie, so will you.
Stephanie: Appreciate that. Yeah. This has been helpful to hear and just talk through.
Ali Katz: Great. Thank you. And I think helpful for everybody, because it's all the same for everybody.
Ali Katz: Did you have a breakthrough in that episode? I sure hope so. And if you would like to have support, to have more breakthroughs so that you can use your law degree in the most highly valuable way possible, so that you always have a service that the people in your community need and want and you know how to charge for it and you know how to deliver it, so that you never really have to worry about running out of money again, even if that's baked into your system very much like it was in mine and in Stephanie's. And if you want the support to make it through the hellish times of starting your own business, which can be truly hellish, especially if you're doing it around a new service delivery model or a new practice area, walking that path alone is just not a great idea. You need support and if you want our support, go to newlaw.co/show and apply for a call with a law business advisor so that we can map your path to PFL and giving you all the support that we have to becoming the go to lawyer in your community for families who are looking for a lifetime of relational care for themselves and the people that they love, go to newlaw.co/show. We would love to serve you. I look forward to seeing you on the inside.
