Catholic Women in Business

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4 Money Mistakes That Keep Business Owners Broke (and How to Avoid Them): Part 1

“Tell them to do good, to be rich in good works, to be generous, ready to share, thus accumulating as treasure a good foundation for the future, so as to win the life that is true life” (1 Timothy 6:18-19).

On a Wednesday afternoon in December 2018, I crumpled onto the bed and sobbed. One year prior to then, my husband had lost his day job. We launched our business, WalletWin, out of thin air six weeks later. Somehow, we managed to get off the runway, but we had no idea how to run a business and faced a steep learning curve. That phase “jump off the cliff and build your wings on the way down” was our life—only we weren’t alone; we had two girls under three in tow.

Naturally, in the midst of all the uncertainty, God gave us an opportunity to grow our family through adoption. We said “yes,” trusting that He would provide (and he did, but that’s a story for another time). I had a panic attack that December day from the immense financial pressure facing our business and family in the wake of adoption expenses and the subsequent time off (aka revenue lost) we needed to transition to being a family of five. The severe sleep-deprived state I was in certainly didn’t help the situation, and I honestly didn’t know if WalletWin would survive much longer.

I remembered rule 5 of St. Ignatius’ Discernment of Spirits: Don’t make a change in the midst of desolation. I acknowledged my turbulent emotions but set them in the passenger’s seat, as I knew they weren’t the best guide. After taking time for prayer and allowing God to restore peace to my soul and clarity to my mind, Jonathan and I mapped out a plan to move forward. We took things one step at a time, and three full years later, I’m sharing the strategies that made all the difference for our family and business.

The No. 1 reason companies go out of business is cash flow problems; in other words, money becomes complicated for a variety of reasons, and all of a sudden expenses begin exceeding revenue on a regular basis. Think of your own life and business: When have things felt extra stressful and chaotic? When were the moments that you worried it was time to close? I’ll bet money was tangled into those chapters, directly or indirectly.

Here’s something interesting: When polled, 60% of business owners who’ve closed up shop said more access to funding wouldn’t have changed the outcome. Why not? Because money is more than math; cash flow struggles are the tip of the iceberg of a much bigger story going on underneath the surface.

According to the Small Business Administration, 80% of businesses survive their first year, 70% survive their second year, 50% survive their fifth year, and 30% survive their tenth year. So, how do you avoid being a statistic? How do you all but guarantee you’re on the “still in business” side of the equation as time goes by?

For entrepreneurs, talking about money (other than dreaming about that big launch that will bring in the bucks) can feel like an unmedicated root canal. But I want to give you fun, informative, simple, and actionable strategies for your personal and business finances, because I want you to stay in business if that’s what God’s calling you to.

Mistake No. 1: An Unhealthy Money Mindset

Most of us were never taught how to handle money, let alone what to think about it. Instead, we absorbed the beliefs, attitudes, and habits that were modeled to us. Starting a business complicates this mindset. Maybe some of the assumptions you have about money are healthy, while others … not so much. Calling out an unhelpful money mindset is CRITICAL so when you bring in a healthy one, it doesn’t commingle with the unhealthy ones—it replaces it.

Think about the process of building a skyscraper: First, they have to acquire the permits, hire the workers, draw up the plans, dig the hole, and pour the foundation. That process takes a lot of time and energy, but it pays off once the walls and floors go up and stay up because the foundation was set. Let's bust some of the mindset myths that I see many business owners struggle with:

Myth No. 1: More Money Will Solve All My Problems

I wish it were true, but more money won’t necessarily solve all your problems. It can certainly help, but often, it’s more about managing what you have and making sure you don’t have a lot of “leaky buckets” in your business.

It’s not uncommon for business owners to have no clue where they’re spending money. As a result, money comes in … and leaks right back out on a variety of unused subscriptions, licenses, memberships, software, unpaid invoices, etc. It’s important to dig into your budget and making sure that you are only spending money on things that move the needle forward for you and your business.

I’ve seen business owners with annual revenue of $50,000 who will be able to retire as millionaires—but on the flipside, I’ve seen business owners with annual revenue of $500,000 who are hardly able to pay themselves, let alone save for retirement. It all boils down to this truth: It’s not about how much you make but what you do with it.

Myth No. 2: I Can Just Hire It out

It has cost us tens of thousands of dollars to learn this lesson.

You don’t have to run around like a chicken with your head cut off DIY-ing everything. But,  you must put the work into understanding the process before you outsource it. The benefits of putting in this effort will be twofold.

Firstly, you’ll find that you can do a good bit of the tasks that initially intimidated you. You might even like some of them! Secondly, even if you wind up hiring help, you’ll know how it ought to be done, how long the work should take, and how much you should budget for the project to ensure you’re not ripped off. You’ll also be able to spot quality work—and shoddy contractors.

You need to understand your business and your standard operating procedures in order to lead the people you hire in the right direction.

Myth No. 3: I’m Making a Lot of Money, So I’m Profitable

Profit = Revenue - Expenses

You’d be shocked at the numbers behind many “big launches” out there. It’s not uncommon for a million-dollar launch to lose money.

It’s OK to run a business that doesn’t earn profit as you are starting out (as long as you aren’t spending more than you’re making). It can take a few years to turn a profit past your business expenses and the income you pay yourself. But, as soon as you’re able to, you need to begin protecting your profit margins.

Just because you have a good launch or a strong quarter doesn’t necessarily mean you are profitable. Paying attention to your revenue and expenses on a monthly basis inside your budgeting or accounting software is essential.

Next month, I’ll discuss mistakes 2 through 4.


Amanda Teixeira and her husband Jonathan cofounded WalletWin, a financial-success program and podcast that help everyday Catholics get intentional with money. In 2012, they were $24,500 in debt, but in less than eight months, they had paid off all their loans and closed the doors on debt forever. Since kicking debt to the curb, they’ve focused on saving, investing, and giving, and they’re now teaching others how to do the same. While not traveling the U.S. in their Class A WalletWinnebago, Jonathan and Amanda live in Omaha, Nebraska with their three daughters Josie, Charlotte, Ellie, and crazy but lovable Labrador Retriever, Wrigley. Their first book, “How to Attack Debt, Build Savings, and Change the World Through Generosity: A Catholic Guide to Managing Your Money” will be released on February 7.