#194 5 Money Habits Sabotaging Your Business Without You Realising It

Most South African small businesses don’t fail because of one big mistake...they fail because of small, repeated money habits that quietly drain cash, kill creativity, and keep owners stuck in survival mode.

In this episode, I’m sharing five money habits that sabotage small business owners and what to do instead so you can build a profitable, sustainable business - without the money worries.

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Link to Music Credits
Track: Positive Motivation
Author: AShamaluevMusic (ASM)
Publisher: CD Baby (IPI 700570289)

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Transcript

Ilonka Ras (00:00.086)
If you're constantly hustling but never feel financially secure, chances are you've got one or more of these five money habits draining your business dry. Here's something I've learned after six years of coaching business owners. The owners who aren't stressed about money, they're not necessarily the ones making the most. They are the ones with the right money habits. Now, if you don't have these habits in place, it doesn't matter how much revenue you make or how profitable you are.

you will still feel broke, stressed and trapped. Today I'm going to walk you through five habits that can completely change the way you run your business, protect your peace of mind and help you build real wealth as an entrepreneur, not just numbers that look good on paper. Let's dig into it. The first habit all successful small business owners have is they view themselves as the asset of their business and they protect that asset.

Yes, your clients, your suppliers, your team are important, but if you, the owner of the business, are burnt out, exhausted and running on coffee fumes, your business will suffer. Period. Think of yourself like the golden goose. No goose, no golden eggs. You are your best, most important employee and you must take care of you. Protecting the asset means prioritizing your health, your brain, your energy, because without you,

There is no business. Think about it. If you had an asset in your business that generated 100 % of your revenue, you'd insure it, you'd maintain it and protect it from damage. You wouldn't run it into the ground and then be shocked when it stopped producing. But that's exactly what so many business owners do to themselves. You skip the workout, promising yourself that you will go to the gym once things calm down, which never happens.

You don't take intentional breaks, working through lunch every day, eating with one hand while typing with the other. You keep everything in your head instead of building systems that allow the business to run without you. It's putting things in place so that you don't have to be at your best or even be around 100 % of the time for things to still happen. Now, if you're a solo entrepreneur, this is even more critical because without you, there literally is no business.

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A single week off could have a massive impact on client satisfaction, project deadlines, and how much you can invoice that month. Now we can't plan for everything life throws at us, especially as business owners, but we can be intentional about looking after ourselves. And it doesn't need to be complicated. It's as simple as scheduling that health checkup you've been putting off, prioritizing it like you would client meetings, or taking a proper day off without feeling guilty.

Protecting the asset isn't about bubble baths and spa days. Those are nice. But it's about making sure that you can think clearly, make smart decisions, and keep your business moving even if you need to step back for a day, a week, or a month. Habit number two is to build a cash buffer of three to six months of business expenses. Your business is like the ocean. Some days it's calm, some days the waves are bigger than you expected.

And sometimes out of nowhere a storm hits and you are hanging on for dear life. A cash buffer is your life raft. It keeps you afloat long enough to figure out your next move. Entrepreneur.com calls it one of the key differences between thriving and struggling businesses. The reality is that the majority of small businesses fail due to cashflow problems, according to multiple resources. Even worse, half of small businesses

only have enough in cash to cover about 27 days of expenses. That's barely a month. Most business owners keep just enough in the bank to cover this month's expenses. You know this is you when you're opening the banking app every morning to check if there is enough to make payroll. Many business owners spend extra revenue the minute it comes in. I see this when the business lands a big clients and then owners immediately start spending on things that they really don't need. Many business owners operate with no cash cushion.

They are one slow month, a late payment, away from crisis. Which means that you end up having to say yes to every project, even the ones that underpay, drag on forever or make you dread opening your inbox, just to cover the bills. So here's why a buffer matters so much. When you're constantly worried about how you're going to cover expenses this month, your brain is in survival mode. You're not thinking strategically, you're just reacting.

(04:40.161)
And instead of using a slow month to improve your systems or create a new offer, you are scrambling for quick cash. The buffer pulls you out of the day-to-day scramble and gives you space to think clearly, make better decisions, and take calculated risks aligned with your strategic vision. It buys you options. You can turn down a bad client, take time to develop a new revenue stream, or

Invest in marketing without fearing that you won't be able to cover rent this month. Let's face it, nothing kills creativity faster than realizing you're a week away from payroll and you don't have enough in the bank to cover it. Habit number three, don't use debt to solve problems that are really about inefficiency. Many business owners see debt as a quick fix. Sales dip, so they take out a loan.

But if your real problem is how you manage working capital, deliver your services or control expenses, borrowing won't solve it. It just makes it more expensive. In South Africa, 29 % of SMEs rely on credit to cover basic operating expenses. If that debt is being used to plug ongoing cashflow leaks, like slow invoicing, poor stock control or over-servicing your clients, you're not solving the root problem.

What I see happening is owners borrowing to make payroll every month instead of fixing their billing cycle or payment terms. They take out loans for equipment that ends up gathering dust because it's not being fully utilized. Using credit to buy stock that sits on a shelf for months because sales forecasting was off. Healthy debt should fund assets or growth, not keep a broken system on life support. If you're borrowing to cover inefficiency,

You're not just losing money, you are turning every rand wasted into even more waste by adding interest on top of it. Habit number four, don't put financial pressure on the business by living beyond your means, AKA live below your means. When your personal expenses are lean, you give your business the space it needs to grow and breathe. What I see too often is the opposite. Owners increase their personal lifestyle the moment revenue goes up.

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Suddenly the business has to perform at a certain level every single month just to keep up with the mortgage, the car payment, the private school fees, the holidays. And now there is zero flexibility and you my friend have created a prison for yourself. Successful business owners flip this. They keep their personal expenses low so that the business isn't under constant pressure to produce. This means you can say no to those bad fit clients instead of taking them out of desperation.

You can invest in that key hire without panicking about covering payroll. You can test a new offer or marketing channel without the pressure for it to work immediately. You can ride out the slow season without sleepless nights. The reality in South Africa is that 82 % of businesses fail because of cashflow issues, with one of the major drivers being owners growing too much out of the business.

for personal expenses, leaving nothing for reinvestment or for emergencies. Mike McAlevich says, the most important thing you can do for your business is not put pressure on it to support a lifestyle it cannot afford. It's the difference between running a business from a place of choice and intention and running one from a place of desperation and survival. Habit number five is to save for retirement. Your business is not your retirement plan.

It's okay to invest in your business, but not at the expense of your future self. Too many owners bet everything on selling their businesses one day or on it producing income forever. The reality in South Africa, only 6 % of SMEs are likely to be sold successfully at fair market value. Research shows that over 60 % of small business owners have no formal retirement plan, often because they are reinvesting everything they have

back into the business. Smart entrepreneurs take profit out regularly and build assets outside the business in investments that will support them no matter what happens in the market, the industry or their health. The goal is to work because you choose to work, not because your bills say you have to. These five habits aren't about making more money. It's about keeping what you have, growing it and buying yourself options. So let's quickly recap.

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The first habit is to view yourself as the asset, to protect yourself as the asset, to treat yourself like you matter because you do. Number two is to build a three to six month buffer of operating expenses so that you can weather those inevitable down cycles in your business. Number three is to use data to fund assets and growth, not to fix inefficiencies and overspending in your business.

Number four is to not put unnecessary pressure on your business by living beyond your means. And number five is to build wealth outside of your business and don't bank on your business as your retirement plan. The good news is you don't have to change everything all at once. And it's never too late to start changing and shifting your relationship with your finances and building a strong

healthy financial future for your business and for yourself. Pick one of these habits today that you will start implementing in your life and your business and let me know in the comments or wherever you are listening to this episode, which one of these habits did you choose for yourself and why? Thank you so much for tuning in this week. I will chat to you again next week.