How the Employee Mindset Keeps You Stuck and Broke

Are you running your business like the job you left? If you are, this is a sure path to frustration, not to mention under earning in your business.

Having an employee’s approach to an entrepreneurial venture simply doesn’t work. What’s so ironic about this is that on the outside you may show all the signs of a successful business owner. If you’re lucky you may actually have a lot of clients and to the world you appear to be doing everything right. On the inside though, you might be feeling trapped (that’s a topic for another day) and your bank account might also be suffering.

The employee mindset not only limits your growth, it insidiously works against you financially, often without you even realizing it. When I speak with other corporate fugitives, I often see signs that they have yet to fully break free from their careered pasts. And length of time in business has nothing to do with it!

Here are three ways that holding on to the employee mindset affects the money side of your business:

Under-dreaming:  Most entrepreneurs (or aspiring business owners) come out of their employment background with the sole intention of covering their financial commitments and making as much as they did in their jobs. If pushed to state an income projection, they often set their goal relative to their previous salaries. They also tend to start businesses doing the same thing they did in their jobs, just doing it now as an independent business owner, in the same sector and often getting contracts with their prior employers. They do what they’re already good at and what they think they can make money doing. This isn’t necessarily a bad thing, unless that work doesn’t make your heart sing! Embracing the entrepreneurial mindset means dreaming as big as your potential is, and creating the business that allows you to achieve it. It also means allowing yourself to remove any perceived boundaries and to ask yourself, what is it that you REALLY want in your life, and then your business? And then having the courage to pursue it.

Under-pricing: Business owners coming from a corporate background tend to under price and under value their services, for a variety of reasons ranging from inexperience in the market to underestimating the costs of doing business. Since so many provide consulting or service-based offerings, they also tend to bill at an hourly rate which is often too low to start with, as well as being a bad idea in general. Billing by the hour instead of being paid for stellar results is the cardinal sin for many business owners. In addition, many newer business owners tend to fall into the comparison trap and set their fees in relation to where they think they fit on the totem pole of experience, especially against other business owners they look up to, instead of in relation to the value and results they provide for their clients. Making this mental shift is difficult because often the behavior is unconscious. Years of being educated and then working in a structured environment where time served and working your way up is what yields greater income is a tough pattern to break!

Another variation of under pricing is failing to set up a business model with enough products or services to have more than one stream of revenue, and not having a higher priced or premium service in the mix. Many business owners feel they need to work up to this, when in reality, nothing is further from the truth. Having more carefully designed services at strategically chosen price points makes your business – regardless of age – appear more credible and more attractive to your potential clients who come in all shapes and sizes and will not all want to work with you in the same way!

Under-billing: Undercharging for your work is much more than not setting your price high enough. Many business owners, especially consultants and service-based, simply fail to charge for ALL of their work. This shows up in the form of giving more time to a client than you had intended, allowing extensions to projects that affect your ability to complete and bill for it, failing to keep on top of your financial paperwork and not invoicing in a timely fashion, and not having financial terms with your clients that work in your favor. It can also mean giving away your services in the name of “helping” someone else, bartering, and failing to set boundaries with your clients. Many corporate fugitives fall into the trap of feeling responsible and approach their clients’ missed deadlines, cancelled appointments and endless changes and revisions as an acceptable part of doing business. As an employee, some of this is expected as part of your job (whether fair or not); as an independent business owner, it isn’t. The difference is that you can control this when you are the boss. Your role is to provide an agreed upon value in exchange for a financial payment, you are not indebted to your client. However many ex-corporate employees operate from a place of servitude instead of service in their business.

Which leads to a fourth very important point – if you’re afraid to lose clients and worried about finding new ones, you may tend to hang on to bad clients and work with those who really aren’t a good fit for you. When you operate your business from this place of fear, you may also stop marketing or do it so inconsistently and unclearly that it isn’t getting the right results for you.

At the end of the day, having a business can be so much more than getting paid for something you’re good at. If you’re choosing self-employment, make it work for you, instead of you working for it!

Want to use this article? You can as long as you include this footer: Sherri Garrity is the Chief Corporate Fugitive and creator of the Five Keys Success SystemTM for ex-corporate employees and aspiring entrepreneurs who want to break free from the confines of their corporate experience and live outside of the ordinary. The Corporate Fugitive system demystifies the business of setting up, managing, marketing and growing a successful and extraordinary business. Visit www.corporatefugitive.com for information and step-by-step resources to take you from overwhelmed employee to extraordinary entrepreneur.