For Entrepreneurs Finances Can Be An Emotional Issue

Today we interview Lorra Brown, who has made it her mission to provide a healthy financial environment to individuals and entrepreneurs. She’s an advisor to many large and small companies, and she’s a passionate advocate for families, women, and adolescents. Her passion for helping others stems from her own story where she found herself a teenage mother, married and separated, with three young children.

It is an interesting interview because she talks about emotional spending and how you can spend money to fill up holes within you — and how that relates to your business. Lorra speaks about having a successful business and what you need to do financially, especially when you’re first starting out, to make your business soar.

Lorra:  What I’m doing now is working with women, advising them on their personal finances, as well as business. I think that every woman should have a healthy relationship with money.

Meredith:  What inspired you to decide to teach women about that?

Lorra:  What inspired me was my own personal journey. I started out as a mother of three young children before the age of 21. Then I was married and divorced. I went through numerous different challenges in my life. Each one of them, as I researched, played off how I handled money. For me, if I got down and depressed, that would make me spend more money. All of my money behaviors stemmed from the tragic events that I was going through in my life.

That was how I handled money. Even though I knew how to manage money successfully, I would still be an emotional spender.

Meredith:  It naturally makes sense. I mean, people have their things that they do when they’re not feeling well. For me, it’s eating chocolate. I’ll admit it. I am an emotional eater more than an emotional spender, but I totally can relate and understand that it would be very easy to spend money. I also imagine that as a young single mother with three small children, you didn’t have a lot of extra money to emotionally spend.

Lorra:  No. When I first started out, I didn’t. That was a serious struggle, because the money was not there. The money didn’t come until I advanced in my career and was a CFO for a large ministry. That’s when I had the emotional challenges. But even before those stages, I had some money challenges. My parents would help pay my bills with their credit cards. I remember a time where I went through a credit card within a couple of months, spending $13,000.

Meredith:  Wow. What was the rock-bottom that you had to hit before you decided that you needed to do something about this?

Lorra:  The rock-bottom was just knowing that there would be a time when I couldn’t pay my bills and my parents were not going to pay those bills. They had gotten to the point where they were not going to financially sustain me anymore. They were pulling the rug out from under me, and I was already at rock-bottom from depression from my grandmother dying. So I just knew. I thought, “I don’t know how I’m going to survive, how I’m going to take care my kids, how I’m going to do anything.” I knew that was the time I was going to have to figure a way out and put to use everything I had learned. Things that I didn’t learn, I had to go and research. Put my hat on and just say, “Okay. I’m going to pull myself up by my boot straps and make this work, because there’s no turning back.”

Meredith:  What was the first step you took?

Lorra:  The first step I took was I sat down and went online to look at all my credit reports, and say, “Who do I owe?” After that, I begin to look at my monthly bills. Through looking at my monthly bills, I asked myself, “Okay, am I living somewhere that costs too much? Do I need to reduce to an apartment versus a house? Am I driving a vehicle that is too expensive? Do I need to reduce and trade in for something else?”

Those were the things that I began to look at. I looked at the income that was coming in and said, “This is all you’re going to be able to do.” I had to make a major lifestyle change. For me, it’s about pride. That will hurt your pride and it was hurting mine, because now I no longer had the lifestyle that I had imagined, or no longer lived the lifestyle that people perceived of me.

Meredith:  I understand how you can do that research on a personal basis. But when it comes to actually being able to show other people how to manage their money, that is sort of a different level, isn’t it? So tell us how you got from that initial stage of working out your own stuff to then being able to help other people.

Lorra:  I begin to do the same process, because the first thing is we all have to know is how much money we have coming in on a monthly basis and if it’s consistent or not consistent. Then let’s look at all the things that you have money going out to. One of the things I tell people is there was a period of time when I had no cable TV. So you may have to go without cable… you may not have the newest cell phone or the bells and whistles. You may even have to just say, “Okay, I can’t have a contract. I have to go over to prepaid.”

Those are some of the things that we use to teach others, because they’re the same principles that worked for me. It’s just looking at how much income is always going to be different, and expenses. The outcome and how we get there is always going to be the same because it always takes income versus expenses, whether in your personal situation or in your business.

Meredith:  When people see their budget, there is the lowering the expenses part of it, but there’s also the raising the income portion. My question to you is, do you recommend that people maybe start a side business as a way of raising the income side of the equation?

Lorra:  Yes, that is a good idea, if they have something that can make money. It doesn’t make sense to start a business that’s not going to make money or help you increase your income. But if it’s something that you research thoroughly, you do the business plan, and you can see that it will generate an increase in income, yes, I’d suggest that.

Meredith:  Great. That’s one of the things that has been consistent with our guests: when you’re starting a new business, you need to do that pre-research to make sure that there’s actually a market for whatever it is you want to do, rather than just saying, “This is something I want to do. I have this hobby weaving baskets, and I would like to teach people how to do that over the phone.” If nobody wants to learn how to be a basket weaver over the phone, it’s not going to be a very good business. That’s a hobby and an extra expense rather than extra income in your pocket.

How did you decide that your gift was to teach other people this? And when did you decide that it was time to leave your job to do this coaching and empowering that you do now?

Lorra:  I decided to leave my job when I had a small established clientele. All the way from part-time in 2006 until 2009, I had part-time clients that I’d meet along the way who would say, “You’re so knowledgeable. Can you help me with my taxes?” I was authorized to do taxes then as I still am now, so I would say, “Okay.” And then they would see that I knew much more about business and they would ask me to do more things. So as I found that there was truly a need for the service that I had and that I could get clientele, that’s when I decided it was time for me to branch out on my own.

Favorite Book: Who Moved The Cheese? by Spencer Johnson

Favorite Resource: Quickbooks

Want to get a free audiobook version of the book recommended by this week’s guest?  Click here to download it.

 

Lorra Brown’s Top tips for managing your finances when you are first starting out.

1) Don’t co-mingle business and personal money — have a separate business bank account.

2) Have some kind of software and system for tracking your money.

3) Get a good person on your team — an accountant or bookkeeper — someone who can think outside the box. You don’t want someone who can just process numbers. You want someone who can see ahead and help you grow your business.

4) Have a plan and check it regularly to make sure it is fitting in with your projections and meeting your needs.

5) Make sure you are consistently collecting and billing on time. If you are uncomfortable with collecting, get your accountant to do it for you.

Lorra-BrownGuest: Lorra Brown – Lorra Brown Enterprises

www.lorrabrown.net

Lorra Brown has ever made it her mission to provide financial empowerment to individuals and entrepreneurs. As Founder of J. Stevens & Associates and Lorra Brown Enterprises, LLC, her active lecturing practice focuses on strategies for growing businesses and financial empowerment. An advisor to many large and small companies, Lorra also acts as a passionate advocate for families, women and adolescents. Lorra’s passion for helping others stems from her own story where she found herself a teenage mother, married and separated with three young children. Despite the challenges this presented, she was determined to put herself through school and later acquired her Master’s Degree. She obtained her start in financial services working at JP Morgan Chase and she also served as CFO for The Urban Alternative the National Ministry of Dr. Tony Evans.

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