How do I know if I'm setting a healthy boundary or just avoiding something uncomfortable?

This is the question at the heart of this whole conversation. Avoidance is an immediate attempt to get away from something uncomfortable. It's short term, and it often brings instant relief followed by a sense of unease, a racing heart, a knot in your stomach, a feeling that something's off. A real boundary comes from a completely different place. It's rooted in your values, it's long term, and it's oriented toward something getting better, in your relationship, your job, your own life. When you set a genuine boundary, you usually feel a sense of calm and alignment, even if it's also a little scary. Avoidance offers relief with a side of ick. A boundary offers steadiness, even when it's hard. Paying attention to your body is one of the fastest ways to tell the two apart.

What's the actual difference between a boundary and avoidance?

A boundary is built on your value system. It's about how you want to engage with the world, and it's long term and goal oriented. If you stop a situation that's harmful to you, the goal is for things to get better over time, in your job, your relationships, your skills. Avoidance is about changing something in the moment. It can start from a real place of self-protection, but it's short lived, and it can quietly become a habit. It can start as small as not wanting to go to the grocery store and turn into someone who no longer leaves the house. Boundaries change your life over time. Avoidance just changes how uncomfortable the next five minutes feel.

Why does ghosting feel easier than just having the hard conversation, even though you feel worse?

Ghosting gives you instant relief. You don't have to sit in the discomfort of a hard conversation, so your nervous system gets an immediate payoff. But it comes at a cost. When you cut someone off without an explanation, you're not just avoiding conflict, you're leaving the other person to fill in the blanks with their own story, usually a worse one than the truth. It creates more anxiety, not less, for both of you. I've come to believe ghosting often comes from a place of people pleasing, not wanting to say no, not wanting to disappoint someone, so we just disappear instead. A real boundary, even an uncomfortable one, at least leaves both people with something true to stand on.

Why does my body react when I try to set a boundary for the first time?

If you've spent years avoiding conflict or people pleasing, your body has learned that staying quiet feels safe. So the first few times you actually set a boundary, even a healthy one, your body might still react like something's wrong. Your heart races, you feel unsteady, because your nervous system hasn't caught up yet to the fact that this new behavior is actually safe. This is where a lot of people talk themselves out of the boundary. They feel that discomfort and assume it means they're doing something wrong, so they slide back into avoidance instead. But sometimes doing the right thing doesn't feel good right away. It takes your brain some repetition to learn that the boundary you're setting is safe, even when your body hasn't gotten the memo yet.

What's a simple process for telling the two apart in the moment?

Think about it in three steps. First, pause and sense what's happening in your body. Avoidance usually feels like relief chased by a knot in your stomach. A boundary usually feels like steadiness, even if there's some nervousness mixed in. Second, check your motive. Are you trying to escape discomfort in the moment, or are you standing on something you actually value? Being honest with yourself here is everything. Third, communicate it, even if that communication starts internally. You can say to yourself, I don't have the capacity for this conversation right now, and that's a boundary. Saying it out loud to someone else, even something as simple as I need to come back to this later, is where the real shift happens.

The Conscious Edge Podcast Episode 118 cover, spending decisions in business, featuring host Alecia St. Germain and guest Jenn Baas, titled How to Make a Spending Decision You Won't Regret in Six Months

How to Make a Spending Decision You Won’t Regret in Six Months

September 15, 2026

Money Mindset & Financial Growth

Every business owner faces the same question eventually. Is this expense a smart investment, or an expensive story you're telling yourself? Financial strategist Jenn Baas joins The Conscious Edge to break down how to make spending decisions in business you won't regret later, from the questions to ask before you spend to how to know when to walk away from something that isn't working.

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You’re weighing something that would make your business look more established than it is right now. A better website. A nicer setup. A hire that makes it feel like there’s a team behind you.

Underneath a lot of spending decisions in business there’s an unconscious belief running that sounds something like this. If it’s not perfect, no one will do business with me. So you buy at the level you want to be seen at instead of where you are, and the business ends up carrying costs the revenue hasn’t caught up to yet.

There’s a lot of coaching that encourages this. Act like you’ve already arrived, spend like you’re already there, and trust the revenue will rise to meet it. Most of it is well-intentioned advice overly applied as one-size-fits-all. But when there isn’t enough runway for the revenue to catch up, it can do the opposite of what it promised and leave you further behind than when you started.

I brought this to Jenn Baas, our financial strategist, for our monthly Money Talks with Zen Jenn. We got into how to tell a need to have from a nice to have, and what to run a purchase through before you commit.

What We Cover

In this episode on how you make spending decisions in business, you’ll discover:

How to tell whether something in your business is a genuine need to have or a nice to have
What questions to ask before you spend money on a hire, a tool, or a big idea
How a belief like “if it’s not perfect, no one will do business with me” leads to spending for reputation instead of need
The difference between being a visionary spender and a security seeker, and how to work with your own tendency instead of against it
Why setting a timeline and clear metrics before you invest protects you from riding a bad investment too long
Why building for scale before your revenue has stabilized leaves you financially behind
What happens in your nervous system when you spend like you’ve already arrived and the revenue hasn’t caught up
What it means when you’re subsidizing your business year after year
How anchoring every spending decision back to a real plan creates more freedom, not less

How do I know if something is a need to have or a nice to have?

A need to have solves a problem that’s actively costing you something right now, money going out the door or work that’s genuinely blocked. A nice to have would make things better eventually, but nothing is breaking while you wait. The confusing part is that almost everything looks like a need when you’re the one living with it every day, especially something you’re tired of doing yourself. Jenn Baas gave a useful way to sort it. Some problems exist because of the stage your business is in, and you’ll grow out of them on your own. Others aren’t working no matter what size you are. Only the second kind has to be solved today. The first kind can wait until the business can carry it comfortably.

What questions should I ask before making a big financial investment in my business?

Jenn Baas runs every spending decision through a set of questions, and the first one has nothing to do with numbers. Why does this feel necessary to you right now? Underneath that answer there’s usually something more honest, like being exhausted or sitting at the edge of what you can hold. From there it gets practical. What does it cost, can you afford it, and how would you pay for it? What do you expect to get back, whether that’s revenue or time and energy returned to you? And how long until you’d expect to see it? When the business is profitable, you’re paying yourself what you want to be paid, and the money is already sitting in the account, it’s usually a quick yes. When you’d be financing it, that’s a time to slow the conversation down and think carefully.

How do I know when to hire someone versus doing it myself?

There’s a difference between a dysfunction you’ll outgrow and a dysfunction that isn’t working no matter what size your business is. Some tasks you can absorb yourself right now, even if you don’t love doing them, because your business is at a size where that’s still the efficient choice. Hiring makes sense when the task has grown past what you can sustainably hold, or when doing it yourself is actually costing you money in missed opportunities. It doesn’t make sense just because someone on Instagram said you should be delegating everything. Before you hire, get honest about whether this is truly outgrown, or whether it’s still a fit for where your business is today. We went deeper on this in EP 109, Outsource, Delegate, or Do It Yourself?, which walks through what to keep, what to hand off, and what you need to budget for.

What's a big assumption, and how does it drive bad spending decisions?

A big assumption is an unconscious thought about the way the world works and how you exist in it. It’s very contracted, if this then that, and it runs automatically without you noticing it’s there. In business it might sounds like this. If it’s not perfect, no one will do business with me. That belief doesn’t stay a thought, it turns into spending. You buy at the level you want to be seen at rather than where the business actually is, because being seen as behind feels dangerous. That’s how people end up paying for polish nobody asked for, or building for scale before the revenue has stabilized. The purchase usually isn’t a foolish one. It just came before the business could carry it, and that cost gets paid somewhere, often out of your own paycheck.

How do I know when to walk away from an investment that isn't working?

This is the piece people skip. Before you make the investment, decide on the parameters. If you hire someone for lead generation, decide now what needs to be true in three months and in six months for that hire to be working. If you invest in a new tool, decide what efficiency or result you expect to see and by when. Without that, it’s easy to keep riding something that isn’t working for twelve months before you’re willing to admit it. Setting the metric ahead of time, before you’re emotionally invested, gives you permission to make a clear decision later instead of an emotional one.

The question underneath a spending decision

There’s a project in your business right now that isn’t quite finished. You probably know which one before I finish this sentence. Mine is the show notes on this website. I have a vision for what they could be, and then there’s what they are.

For a while I told myself hiring that out wasn’t the responsible move, and I couldn’t tell whether that was good discipline or just avoidance.

That’s where a lot of spending decisions in business start. Not with the numbers. With a story about what we think people will assume if we don’t spend the money.

So I brought it to Jenn Baas, our financial strategist. Jenn started as my bookkeeper and is now our outsourced CFO, and we sit down regularly to decide where the money goes.

A need to have or a nice to have

Jenn split it in this way. Some problems in a business exist because of the stage you’re in. You’ll grow out of them, or you’ll solve them later when the business is bigger. Other problems aren’t working no matter what size you are. Only the second kind needs money thrown at it today.

The show notes were the first kind. I knew the experience wasn’t where I wanted it. I also had no proof it was costing me any traffic. So I let it stay a little broken instead of hiring against a problem I couldn’t measure.

Almost everything feels like a need when you’re the one living with it, especially the task you’re tired of doing yourself. That’s the part that trips people up. If you’re sorting what to keep, what to hand off, and what to budget for, EP 109 goes deeper on exactly that.

Spending to look the part

Take the show notes. A big assumption is an unconscious thought about the way the world works and how you exist in it. Very contracted. If this, then that. It runs on its own until you catch it. So I could be carrying one that sounds like this. If everything’s not perfect and professional, no one will ever do business with me.

I don’t believe that anymore, but there was definitely a time when I did. Watch what it would do if I still did. It would send me one of two directions. Either I pour hours into getting the show notes just right myself, time the business needs somewhere else. Or I feel the pressure to hire it out and spend money we never allocated in the budget at the start of the year, for a fix that doesn’t point to any direct return.

That’s how a big assumption turns into spending. You buy the version of your business you believe people need to see, at a level the revenue hasn’t reached yet, because being seen as “unprofessional” feels dangerous. And there’s a cost. Plenty of business owners make a hire they can’t quite afford to look the part, and end up paying for it out of their own paycheck.

Jenn pointed out that we can almost always make a good case for spending money. That’s not the hard part. The reason always sounds strategic. The harder question is whether the business can carry the cost right now, and what you give up to say yes.

Acting like you’ve already arrived

There’s a whole coaching strategy that tells you to act like you’ve already arrived. Present the business at the level you’re growing into. Spend at that level and trust the revenue will rise to meet it.

I get the thinking. What it leaves out is what happens when there isn’t enough runway for the revenue to catch up. It doesn’t account for both external and internal influences. Depending on what big assumptions you’re living with and what’s happening in the marketplace, it can affect how fast and effectively you create results.

When the runway gets short, your nervous system gets activated. It doesn’t care that this was a strategy. It reads the gap as a threat, and that’s when the panic decisions start. Fast moves out of fear instead of a plan. Longer hours to close a gap the spending created.

Now you’re trying to catch up with your whole system in survival mode, which is so much harder than catching up from a steady place.

“Generally, we can make a good case for spending money. That’s not the hard part.”
— Jenn

Visionary spenders and security seekers

Most of us lean one way with money. Jenn puts it around fifty-fifty across her clients.

The visionary spender spends toward the vision, sometimes past what’s comfortable. Money moves freely, sometimes into debt, in service of what might be possible. She can justify almost anything, because there’s always a reason it makes sense. Her growth edge is building safety underneath the vision so it doesn’t tip over.

The security seeker holds money tightly. Income goals feel fine until they get high enough that her nervous system pulls back, and then she grips harder. Her growth edge is trusting that spending to grow won’t cost her what she’s already built.

Jenn will raise her hand as a security seeker. This past summer she looked at practice management software for her own company that ran about forty percent more, even after cutting what it replaced. Her gut said no. Then she ran it through the same questions she gives her clients. Can I afford it. What does it make more efficient. What does it do for the client experience. She bought it.

That’s the useful part. The same set of questions reins in the spender and gives the saver permission. One filter that works both directions. Jenn also keeps someone with the opposite tendency close, and suggests you do too. A partner, a teammate, or a strategist who knows how you lean and whose read you trust enough to hear.

Deciding ahead of time when to walk away

This is the piece most people skip. Before you make the investment, decide what would tell you it isn’t working. If you hire someone for lead generation, define what needs to be true at three months and at six. If you buy a tool, determine the efficiency you expect and when.

Without that, you can ride something for a full year before you’ll admit it isn’t paying off. Jenn sees it most with hiring, because small business owners genuinely love their people and hold on too long. Setting the metric up front, before anyone is emotionally invested, makes the later conversation clearer for both of you. The person you hired knows where they stand too.

“If you’re subsidizing your business year after year, it’s not a business.”

When you’re subsidizing the business

There’s a loving, hard truth in this conversation. If you’re covering your business’s losses out of your own pocket year after year and it never gets to profitable, something fundamental isn’t working. Jenn calls for radical honesty here, and she’s careful to say it’s still your call. She just wants you seeing the real picture before you make it.

Debt can hide that picture instead of fixing it. If that one landed a little close to home, EP 99 is a good next listen.

“The discipline is actually what creates the freedom.” — Jenn

Anchoring back to a real plan

The line from Jenn I keep coming back to is that the discipline is what creates the freedom. Most of us start a business to get out from under someone else’s rules. The people who get that freedom are usually the ones who built an anchor point first. A plan they can hold a spending decision up against.

The plan isn’t meant to lock you in. Jenn was clear it’s a reference point, and you have full permission to change it as the year goes. She watches people pass on good opportunities they could easily afford, only because it wasn’t in the budget. If budgeting has always felt more like a restriction than a tool, EP 93 gets into why.

So the next time you’re weighing a spending decision in your business, start further back than the price. Ask what problem it solves. Then ask whether that problem is happening now, or whether it’s a story about who you’re afraid people will think you are.

About Jenn Baas

Jenn Baas is the founder of Peak to Peak Solutions, where she helps small business owners navigate the financial ups and downs of entrepreneurship through accounting, bookkeeping, and strategic CFO services. She serves as a fractional CFO for The Conscious Edge and leads the Financial Leadership Lab for Alecia’s clients, bringing practical financial strategy to the human side of building a business. You can find more about Jenn’s work at Peak to Peak Solutions.

Resources and Links Mentioned

- - - - To explore Jenn’s outsourced CFO services, visit peaktopeaksolutions.com.
      - To work with Jenn inside the Financial Leadership Lab, book a Capacity Assessment Call at consciousedge.com/capacity.
      - Instagram: @aleciastg

If you suspect your habits are costing you money and opportunity, you can get insight on the unconscious assumptions driving your financial decisions and how to change them. Simply book your complimentary Capacity Assessment below.

Book Your Call Here

You Might Also Love

EP 109 — Outsource, Delegate, or Do It Yourself? How to Get Your Time Back

EP 99 — Is Debt Helping Your Business or Hiding Its Problems?

EP 93 — Why Budgeting Feels Restrictive and What to Do Instead

Full Transcript Here

Alecia St. Germain 00:00
Before we get started, did you know you can get behind-the-scenes access to these episodes before anyone else? Meet other listeners of this podcast and connect with show guests, my co-hosts, and me live in real time. All you have to do is become a member of Podcast Club. We record episodes in front of a live virtual studio audience. Then, after the episode is finished, we open a private, unrecorded conversation where you can share your thoughts, ask questions to go even deeper on the topic of the day, and even influence the content covered in future episodes. Here's the thing: I love podcasting, but I love having real conversations with real people more than broadcasting into the ether. Social media promised us connection. Now it's morphing into something else entirely-a distraction to keep you scrolling. Podcast Club is my way of reclaiming the space for connection. If this sounds like your kind of room, come join us. Go to consciousedge.com/club and become a member of Podcast Club. Sometimes it's very challenging to know when you should spend money in your business because it's needed in order to grow, and yet balance it out with what your bank account actually says and what your business can financially afford. This is a question that came up recently in Podcast Club, and so I asked our resident financial strategist Jen Boss to come on one of our monthly money talks with Zen Jen and ask her to unpack this question with me. So let's get into it. Hey, you leader, entrepreneur, business owner, solopreneur, whatever you call yourself. We know you're a visionary business builder, wealth seeker, looking to combine a passion for doing good with leading consciously, it's time to shift from a traditional focus of pure wealth accumulation to one that integrates well-being and fulfillment. You're here for a purpose, and it's time to shine your light. So here we go. Welcome back to the Conscious Edge podcast. I'm your host Alecia Saint Germain, founder of the Conscious Edge, and I am here with Zen Gen, as we call her. She is a financial strategist, founder of Peak to Peak Solutions, and she also coaches inside of the Financial Leadership Lab at the Conscious Edge. So Zen Jen makes all the numbers. She makes us all feel calm and comfortable about it. I'm so excited that you're here, Jen. Me too. Thanks

Jennifer Baas 02:47
for having me.

Alecia St. Germain 02:48
You are here on our first official live broadcast of the Conscious Edge podcast. We are recording in front of a live studio audience. Oh, they even sent us a little like. I

Jennifer Baas 03:01
did see that. Yay! We would just be happy.

Alecia St. Germain 03:05
I love. So we were saying. I said it's going to be like Friends. Don't worry. We'll. We might stop. We might have to do some editing, just like being in a live studio audience. If you were in front of them filming Friends, and she goes, "We just we need to do an applause button, and I did not realize there would actually be one.

Jennifer Baas 03:25
So cool,

Alecia St. Germain 03:25
so very cool. So here's how it came up, Jen. We were doing podcast club over the summer, and we were not doing it in front of a live studio audience. So there was some questions that had come up, and I parked them, knowing that we were going to start doing these podcasts like this. And so, the way that it actually came up was, I was talking about in my business needing to hire someone. There are some things that I do behind the scenes, that are not my-I can

Jennifer Baas 04:05
do them. I

Alecia St. Germain 04:06
don't like to do them. It's not particularly fun to do them. And so the question was like, "Well, everybody says you should hire out all these things that you're not good at or aren't in your zone of genius to free you up to do these other things. And so the question was, why hadn't I done that? And there's a balance between what you choose to invest in order to free up your time and energy for growth, or just for life, and what financially makes sense for the business. So I thought we could talk about that today. It's a great topic. Yeah, and I imagine you see it all the time. So, yeah. Backstory for anybody who doesn't know Jen. Jen is I originally hired as my bookkeeper, and then you became really like the controller or CFO out. Source CFO for the Conscious Edge, and we meet on a regular basis, and we make decisions about what I'm going to do with the business, where I'm going to spend the money, and it really comes out of me taking on the story that I had that I'm not good at numbers, and running the business from a place of pure vision and being compliant with my taxes, and that was about

Jennifer Baas 05:26
it.

Alecia St. Germain 05:28
So it's been a journey with you. So where do you want to start with this topic? For me, I think about like I can't remember what you call it-the two types of problems that people have. There's like a problem for growth and

Jennifer Baas 05:42
dysfunctions. Yes, yes, yeah. Like we have some dysfunctions within our business that exist because of the stage of the business that we're in, right? And there's a point in time where we will outgrow those or be able to problem solve them in the future versus a dysfunction or problem that's just inherently not working, regardless of the size. So there's some things that work at that smaller quantity, smaller size. Just like in your example, you can do all of those behind the scenes things that you don't really enjoy doing because of the current size of your business, it is something that you can absorb, even if they're not your most favorite thing to absorb. And so that's a really good example of that type of thing. Where long term, it's maybe not a fit. Long term, it's not in your zone of genius or where you want to be spending your time. But at the moment, you are getting a benefit from that. You have that cost savings. You have cost efficiency because of that, and so there is this balance point to try to find between when do we invest in that growth or when do we take that step and take on that increased cost, while also being mindful of what works well for the business and keeps other financial goals in mind at the same time. So then, the next thing I would ask you is, in the specific context of what wasn't what where I was the bottleneck in my business, and it's something that probably doesn't need to be done by me. It was for some tasks that are not high priority, like it's not clear that they really drive business or have a return on investment. There may be like a nice to have, or

Alecia St. Germain 07:30
they lend more to some of the traffic that I would drive to my website. Specifically around this podcast, actually, there's moving the podcast episodes into the website and making it like a lovely user experience, and writing some of the SEO. And I wasn't really clear if there was any traffic even going to it, so I didn't make it a high priority thing. And so it was something that I was okay with just

Alecia St. Germain 08:02
letting it be broken and not work the best because of the return on investment. So I think there's that level too of like, is this really a high priority project that even needs to be done? So

Jennifer Baas 08:18
right. I mean, I think if we take a step back and think about, like, just globally, there's lots of different ways we can invest in the business, right? So there's different things we can subscribe to, trainings we can take, people we can hire, and again, in this kind of like Instagramy kind of culture, there's a ton of messaging saying like, just do it, and you have to spend money to make money, and you have to have that hope and faith that it's all going to work out. And what I think that lacks is that anchor point of the current reality that you do have. And so when we talk about like when do you make that investment, when is it worthwhile, those sorts of questions like what is the return, how important is this? Those are things that we should filter those questions through and try to understand. So there could be a situation where it is a more high priority problem, and it's going to solve a real issue. There's going to be maybe some sort of predictable financial component to it, where it's going to help increase things. When we start working through some of those questions, it can give us more clarity of is this a decision that makes sense in the moment, or you can start working through some of these questions and understand like, yeah, this is still in that nice to have column, and it's not something that makes sense for the financial cost at the moment, and so that's my big encouragement for people. Instead of just like jumping off the cliff and taking every good opportunity as it comes, because we can probably justify a lot of it. A lot of it does make sense from one perspective, but what happens is it can quickly get us out of alignment with the reality of our current financial position. On our current financial goals.

Alecia St. Germain 10:02
So, how often, in your experience, do people spend on things that actually create a return on investment or like pay for themselves over a certain period of time, and it makes financial sense? And how often do you see people spending on those nice to haves out of maybe like FOMO or a big assumption. Which anybody who doesn't know or you're new listening, a big assumption is an unconscious thought you have about the way the world works and how you exist in it, and it's very contracted. It's like if this, then that, and it's an a thing that your brain thinks will always run automatically. So, in the example of the show notes for this podcast, which anybody's been to the website, like I have a vision for what I want it to look like, and then there's what it actually is coming together as until the point where it would financially make sense for me to hire to like maybe get someone to really just knock it all out, and so I could have a big assumption that like if you did not see my show notes perfectly, that then you would choose not to do business, then no, not even you. No one will ever do business with me because I'm not perfect enough, and so then that would cause me to make a hire that maybe the business couldn't financially afford, which then would have a ripple effect of like maybe I cannot pay myself, which a lot of business owners do. Is like they do a lot of things in their business that financially don't make sense to look good and serve big assumptions, and it's at the expense of being able to take a paycheck for themselves. So, how often do you see like sorting through those things, or

Jennifer Baas 12:01
yeah, maybe I

Alecia St. Germain 12:02
might say like, what would you ask an entrepreneur or somebody you were consulting to tease that out?

Jennifer Baas 12:08
I think it. I think people tend to just almost by personality, or maybe it is with big assumptions, be in a little bit of one camp or the other. So you have some people who are reluctant to spend; they're very conservative with their money. They're running everything through that lens of like, does this make sense, and all of those things. Those people can sometimes need to be pushed to actually invest and to spend money because they're so tight with that money. And on the other side of that, you see people who are very free with their money, and they're they don't have that internal like lens that they're running things through. So these people tend to be that like, if I spend it, it will come back to me. If I invest in it, it will help my business grow. A lot of very entrepreneur types versus just business owners, they tend to be in this camp where like it's all just going to work out. It's all going to be fine. You have to invest to make money. That tends to be that tight. But then there is another set that is more conservative, and so I find people do tend to sit in kind of one camp or the other. I would say it's probably 50-50, and then in my own kind of client makeup, it kind of depends on the composition at the moment, like, but I would say with that entrepreneur type, which I think is a little different than a business owner, it's a little bit of a nuance there. They tend to be more in that free spirit, gotta rein them in category.

Alecia St. Germain 13:35
So it sounds like entrepreneurs being defined as like more risk tolerant. Yes, wrist

Jennifer Baas 13:40
tolerant. Like they're wanting to do lots of things. Like, oh, they always have those ideas. They're the ones that don't just want to have one business that works well for them. They're like, we're going to do this, and we're going to do this, and I'm going to start that, and I've got my finger over here and my toe over there. That type of person versus that person that maybe just they're a small business owner, but they're just doing their thing and they've got their business that works well for them, and that's great.

Alecia St. Germain 14:04
So, yeah, I call them the visionary spenders.

Jennifer Baas 14:07
Yes, yes, and they can justify anything, right? There's always a reason. It always makes sense. It's always going to be the thing that comes in and saves the day. And what's difficult in those situations is like I said. Generally, we can make a good case for spending money. Like that's not the hard part. The question is more like, what is the timing like? Can we afford it? Does it accomplish that goal that we're looking for in the moment and still serve those broader goals of like maybe we're trying to also be profitable to a certain percent. Maybe we're trying to pay the business owner, give raises, whatever we're trying to do inside of that broader financial kind of context. And so, when people don't anchor back into that plan, they will go and make those really quick emotional decisions and make those spending decisions, and some of them pay. But a lot of them, what I see, a lot of times they don't, and all of a sudden there's just a lot of money going out the door because it hasn't been anchored into that decision-making context, and that's where we can end up with a lot more overhead or a lot more expenses than what the business is really prepared to support.

Alecia St. Germain 15:18
So, what is the question that you ask, what's the first question that you would ask someone who's got that vision for growth or that vision for the next level, and they want to spend some money or invest some money that's going to have a return for their business?

Jennifer Baas 15:35
Yeah, the first thing I usually try to understand is why they feel like it's important. So, why do they need it, and then maybe some other things that are behind it? Sometimes, if you stay too surface level, you don't get that deeper context where maybe they're wanting to hire that support, and underneath it, like they are exhausted, they're burned out, they're on their edge of not being able to do everything, and something's got to give, right? So, really trying to understand as deeply as possible why they feel like that thing is necessary? That's usually my starting point for gaging temperature.

Alecia St. Germain 16:07
Like, what's the goal, or why is that necessary? Okay, exactly. And then from there, what do you do?

Jennifer Baas 16:16
From there, we're going to look at things like how much does this cost? Can we afford it? How are we going to pay for it? What return does it bring? So a lot more of those planning-based questions, and that will really help clarify pretty quickly. Like, is this pretty much instant green light? Yeah, let's go for it. Or do we need to put more thought into it? If there's a situation where the business is profitable, owners getting paid what they want to be paid. This wasn't really in the plan. There's money in sitting in the account to pay for it. It's going to have these upsides that can be a pretty quick. Okay, cool, makes sense. Like, let's go for that. In other contexts where it's like, hey, we don't have money to pay for this. Okay, then what? What are we doing? Are we putting it on a credit card? Are we financing it on a line of credit, and then what does that picture look like? How quickly can we pay it back? What's the financial return? So if we make this decision now, how long until we expect to start seeing some sort of benefit, whether it's like operational and efficiencies or financial, and so really digging through those questions to help make it make sense in the moment. Whether it's like yes, this is worth the risk, or no, this is something that's a not yet. But let's put it in for next quarter. Those sorts of things.

Alecia St. Germain 17:33
Let's plan for it. Let's figure out a plan for it. Yeah. And then on the flip side, but it's not always just about numbers, right? So it's not always about the bottom line because there's been conversations that you and I have had: is what is my time worth? And so it's not just flat out financial. There's or what's a component that just brings me joy, and regardless,

Jennifer Baas 18:00
yeah,

Alecia St. Germain 18:01
I'm willing to take less profit to do this thing that brings me joy that serves. Yes, or whatever

Jennifer Baas 18:09
it is. So I agree and disagree. Like there, it's not necessarily that there always has to be a financial upside, but I do think it's important that we understand the financial impact.

Speaker 1 18:20
Okay,

Jennifer Baas 18:20
and so it's exactly to your point. I want us to be able to put it on paper, and I want you to say it's worth it to me to make X dollars less this year if it comes down to it, because it's that important for these reasons. But what I don't want us to do is just think this is worth it for my happiness, and we have no context of the impact because that's what I see happening most of the time. Right, most of the time we're justifying, we're spending, we're hoping. I heard a quote yesterday that I sent over to you, and then realized it fit really well in this context. That hope is not a plan, and I was like, "Ooh, I've already used it in a conversation with a client, and they were like, "Ooh, ouch! It stings a little. And I'm like, "I know, right? It's just so like a lot of times we just hope that it's going to fix the problem, or hope that it's going to do something, and hope in and of itself is not a plan. So what I want to see is let's have a plan around that. Let's understand that financial impact, and sure you might say, "Hey, I'm totally fine going in debt with this because it's worth it. I just want you to understand overall what that impact is, and then also I think the last piece a lot of people miss is putting some parameters in place, especially if it's a stretch and it's a risk, and we're like, "Okay, we're going to invest in this, but at some point, we kind of need revenue to catch up, or we kind of like we need something to shift to make it all work. We also need to put some parameters around that. Like, if in three months nothing has shifted, if in three months I haven't gotten enough time back to be able to put into this, if I was just speaking with a client the other day, they may. A new hire to help generate leads for sales and marketing. Well, if in six months that person hasn't actually generated qualified leads or translated to sales, we need some sort of ability to assess at what point is that investment actually not worth it or not working in the way that we want it to. And so that's the final capstone that I like to put in place that keeps people from just running indefinitely with something that's not panning out. Like sometimes we do take that risk, but we don't just want to do it for the next 12 months before we realize it's not serving us the way we thought.

Alecia St. Germain 20:35
Right. That's why you need those monthly check-ins, those benchmarks, those check-ins, those KPIs to say to evaluate these spendings that we are doing and making sure that we're actually getting what we intended out of it. So I want to go back to the one where you said we're very commonly you see like I spend because it brings me joy in my business. It's this thing I want to do. There's a like people who love to educate themselves, and they love consuming knowledge, or they like being in masterminds, or they like because there's some outlets that they get from that. And like you said, as long as financially it's being covered in a specific way, there's a financial plan for that, right? Then we can certainly. What I love about you is that's a whole lifestyle. It's like, does what we do serve your needs? Does it feed your family? Does it bring you joy? Does it serve a mission? Like, what is the purpose of this business? Why does it exist? Beyond the money is a piece of it, and I don't think that every strategist or financial person looks at things really like you do. Absolutely, and when you get to the point though where your business is not cash flowing, it's negative cash flowing for, and you enjoy it, but it's not paying you, and it's costing you. It's a hobby. It's a boat. It's a yeah,

Jennifer Baas 22:06
yeah. It's I always say like we need some radical honesty around it, right? And again, I don't judge the end result. That's for the business owner to make decisions about. But I do want us to be honest about what's happening, and sometimes what I see is like the whole thing we want our cake and eat it too, or whatever that is, because like we want to have the business that we don't really have to work that hard for, and gives us a ton of flexibility, and we can do all of these fun things that fill our cup. Like we want all the things, and sometimes that is how it works, but more often than not, there are some hard decisions that we have to make about that. And really structuring it, if we want to grow like a healthy, profitable business that provides for the future, a lot of times that means staying pretty lean for periods of time, or having the need to haves and not the nice to haves for that period of time until we are at that point where the business can support it, or the owner's okay with like not getting paid because they get these other benefits or having some of those trade offs. But it's just like understanding all of those pieces and then being empowered to make a decision that you're happy with. Right,

Alecia St. Germain 23:19
right, yeah. If you're subsidizing, if you're year after year subsidizing your business, it's not a business.

Jennifer Baas 23:25
It's not a business, and something fundamentally isn't working with it. Right.

Alecia St. Germain 23:30
So I did want to double click on that a little bit, and it's a loving hard truth, right? Like that's nobody wants to hear that, and I get it.

Jennifer Baas 23:38
And I think a lot of people get into that point, because they don't have these anchor points, right?

Alecia St. Germain 23:44
Right.

Jennifer Baas 23:45
And again, a lot of people get into working for themselves or being a small business owner, being an entrepreneur. I think we've even heard it in the financial leadership lab, right? Like because we don't want to be tied to things, we don't want to answer to people. We want to have the freedom and the flexibility to do what we want, and there is a lot of that freedom, but I think it also takes a lot more discipline than the average business owner actually wants to execute. And if I could flip one thing on its head for people, is that the discipline is actually what creates the freedom. So anchoring in, creating the connection, creating the understanding of your finances, having plans around when do we invest in this, when do we not-that's actually what gives you the freedom and the enjoyment to enjoy your business and have it flourish. The idea that you can just do whatever you want in whatever way you want and not have to answer to anything sounds really good on paper, but it's very untethered, and I don't find that it's very successful in the long run.

Alecia St. Germain 24:43
Yeah, that's where you get into those situations where, and you've even asked me, like, "Hey, on the mindset side of things, like, how do I land this with someone who needs to like stop bleeding their business right? Because this is the other." I've seen happen through history in real estate and seminar industries and training industries where there's a figurehead and that the business starts to make a lot of money, and then they start to build this really bougie lifestyle, and then when the business hits hard times, they like suck the business dry, and then it goes out of business.

Jennifer Baas 25:23
Yeah,

Alecia St. Germain 25:24
and they still expect it to keep providing for them in that way, and they're not making those hard decisions. So, so that was one side of things that I wanted to break down with you. And then there's like evaluating what is really needed in the business, and what is, like you said, a nice to have, and then the timeline, like how long are we going to make this investment? How long before we reevaluate? And how much, maybe even, are we willing to lose on something that is a risk?

Jennifer Baas 25:56
Yeah, absolutely. Like you said,

Alecia St. Germain 25:58
the person who hired someone who's supposed to do lead gen, and in six months, if if they're not paying for themselves,

Jennifer Baas 26:06
exactly. Well, and I think a lot of times too, particularly with people decisions, I find most small business owners don't love letting go of people. Like I just don't know that anybody really enjoys it. I think in a more corporate setting, it's so much more common, and things are so much more metric driven that this is a little easier in bigger business. But in small business, when you're talking about teams of 510, 1520, like that's very small and it's very personal. Typically, you really like the people, and I would say like 99.9% of time, most small businesses are not making a decision to let go of people soon enough. They're keeping people too long because it is personal, and they genuinely like the people. And so, when we're talking about investing in a new position or a new person, I think it becomes even more important to make some like very objective metrics around that, because that helps keep it very clear from the front end. Here's the dynamic where this works, and if we get to that whatever month point and we haven't met those, we can have a much clearer conversation about is this something that just needs a couple tweaks, or is the data showing us what we need to make that hard decision and make it a little quicker?

Alecia St. Germain 27:25
And you're planning for it ahead of time. Yeah. So when you're not as emotional about

Jennifer Baas 27:30
it, yeah, employee also knows where they're at. If it's a person too, right? You can put that in front of them and say, "Here's the metrics that we need you to hit in the first, second, five, whatever. So everybody is very clear about where this stands,

Alecia St. Germain 27:46
right? So now here I can see from the leadership side of things is like being afraid to really put that. Well, if I put that pressure on them, and what is that going to do to them? And like that feeling bad about putting the pressure on. Yeah,

Speaker 2 27:59
and

Alecia St. Germain 28:00
that's where I look at that in your relational capacity as how well do you lead others? So when you're able to communicate, here's the expectation, and this is why it has to happen because otherwise, financially, it doesn't make sense. And we're going to do everything we can to support you, help make you successful. Here's our role in that. Here's your role in that, and so it's really clear. But people are so uncomfortable to do that.

Jennifer Baas 28:31
They are, and sometimes I think they can get confused about what they should share with it. Right. So I do think there's still what I call like inside thoughts and outside thoughts. So sometimes I will see like a business owner really trying to make that effort, and they say something to an employee, and I'm like, "Oop, that should have stayed an inside thought. We don't want to scare them, like you said. We don't want to put a ton of pressure on them. So there's a way of clearly saying, like, "Here's the expectations for the first six months, and having check-ins against them. That's not we're going to fire you in six months to the day if you don't perform, right? So there is this balance of we want to give the right kind of information to our team. Same thing if you're talking about maybe the business isn't doing well. There's ways to share that information. There's ways to create metrics that allow everyone to work towards improving the business without terrifying everybody, so they go out and find new jobs. So it's a little bit of that line of like we want to be honest in certain ways, and then some stuff should stay with leadership or should stay internal with the

Speaker 3 29:35
owner. Yep,

Jennifer Baas 29:35
some thoughts are inside thoughts. Some thoughts are inside thoughts.

Alecia St. Germain 29:41
All right, so we're gonna wrap up, but before we do, I want to go to the flip side of like the person who's the saver, like the. I'll raise my hand here. I'll

Jennifer Baas 29:51
identify myself,

Alecia St. Germain 29:53
and well, you have, but you have a little inside track because, and I think I know where you're gonna go with this, but I'm gonna ask. Anyways, so what is the thing that helps them loosen their grip on the money and being willing to make the investment? I mean, all the same questions apply, but then being willing to make that investment and know that they're going to be safe.

Jennifer Baas 30:18
Yeah, I think with that type of client, a lot of times, what I'm working on is really focusing on the benefits that they're going to get, and then understanding that they are in a safe financial position to be able to do this. So it's really with them helping them understand that if you just keep your money and you're not going to reinvest it, you are going to limit the growth or the health, the efficiencies. For like a personal example, I this summer I invested in a practice management software for my company, so we could just become more efficient, have a client portal, those sorts of things. And it was about 40% more in software cost. Essentially, like I looked at what I could eliminate, it was going to cost me about 40% more, and so my initial reaction was like, like, nope, I'm not going to do it. But what I had to work through is like same matrix. Like, can I afford this? What internal efficiencies does this create? What does this help with on the client experience? All of those things, and that same discipline that helps rein people in will also help encourage the people who are too tight with their money to go ahead and make that decision and work on investing and growing their business in those ways.

Alecia St. Germain 31:30
So, in the financial leadership lab, one of the things you have been working with them on is some templates to set budgets in the first quarter of the year, and then midway through the year, we look at budget to actuals, and then we project based on how things are tracking with the actuals. We do a projection of how the the year will end. And so, what I imagined or thought was also seeing, I mean, both for the people who need to rein it in a little bit, but also for the person who's like, "Well, if I actually put that expense in, here's the impact that has on my bottom line, and reasonably based on how the year has been going, this is a very safe, like very reasonable investment to make. So I think those that budget budget to actual and projection is huge for that.

Jennifer Baas 32:27
Again, that's like that's your anchor point, right? That's really what gives you the lens to view your decisions and feel confident and comfortable, or be pushed whichever direction you're needing. Whether you need to give that confidence or whether you need somebody to pump the brakes with you, that can be really helpful. If you're in a business partnership, the other thing I think can be helpful with these dynamics, or even if it's not a partnership, having the opposite personality, either as a partner or somewhere on your team or as your financial strategist, that can also really help. So somebody who knows your tendencies and somebody who you respect enough to listen to their input, and that is a really great way of helping counterbalance whichever side you end up being on, and that's very helpful.

Alecia St. Germain 33:15
Yeah. So awesome. All right. So we are finishing up our first like end of live in front of a live studio audience, it's very cool to get to see the chat and what is coming up. So we have a comment here that this is so valuable because people don't actually say these loving hard truths. So it's really really helpful to hear and really liking the idea of anchoring, anchoring the decisions to spend or not spend into really the bigger picture of everything. So you got some love in the chat now. What will happen now is we'll actually be hopping into a private Zoom that is unpublished, and the people in Podcast Club get to pick your brain, ask questions. We get to go deeper on this particular episode. So, if you want to be part of podcast club, you can go to consciousedge.com forward slash club. We would love to have you in these private conversations. These people get access to the live unedited recording, so whatever fluffs or bluffs or whatever we come up, the bloopers, if you will, they see it all unedited, and then we get to go deeper. So I think it's a really cool thing that they get early access before anybody else in the public gets it, and it's just a really really cool thing that we're excited to launch. So, any final words, Jen?

Jennifer Baas 34:45
I would just say, yeah, keep anchoring into the plan, keep viewing your decisions through that, and also, if you have the plan, don't be afraid to make a different decision. So that's probably the only thing that we didn't really touch on is some. Times I'll see people have their plan, and they'll be so committed to it that a really good opportunity that makes sense and that they can afford comes up, and they won't take it because it's not the plan. So keep in mind that plan is a reference point, and we have full permission to change it as the year goes by, which might be counter indicative of some of like the classical budgeting kind of context we typically have, but ultimately we want to make decisions that work well for us and work well for our company, and sometimes that means changing the plan.

Alecia St. Germain 35:30
Yeah, yep. Those are all things that we talk about inside of the Financial Leadership Lab. So if that is something that you are interested and want to explore, you can book a call with me at consciousedge.com forward slash call. All right. So with all of that being said, we're going to hop into the private chat with our podcast club people, and sending you so much love. We'll see you next week. Thanks for listening to the Conscious Edge podcast. Make sure you subscribe and take a moment to be kind and share this episode with someone you care about. Leave a review to help us bring more compassionate leaders building businesses and creating wealth to the table. And for show notes, head over to consciousedge.com/podcast. This podcast and the linked materials are presented solely for general information, educational, and entertainment purposes, and should not be taken as personal or medical advice or any kind of mental health treatment. Please consult a medical or mental health professional if you feel you need such services. Please be advised that all investing and entrepreneurial endeavors involve risk and the use of the education and information on this podcast and linked materials is at the user's own risk.

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The Conscious Edge and content posted by Alecia St. Germain and Jonathan Dugger is presented solely for general information, educational, and entertainment purposes and are not liable or responsible in any way for any negative results from users implementing the education or information in the podcast or website. This podcast and the linked materials are not to be taken as personal advice, medical advice, or any kind of mental health treatment. Please consult a medical or mental health professional if you feel you need such services. Please be advised that all investing and entrepreneurial endeavors involve risk, and the use of the information and link materials is at the users own risk.

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