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In business, managing your finances is only part of the equation, another big chunk of that equation is working on your mindset.
Investing in your self-worth and developing a success mindset is crucial to creating a profitable business and the life you’ve been dreaming about. It’s all about establishing a positive money mindset and mastering your ‘Upper Limit Issues’.
The ‘upper limit’ is a term originally coined by Gay and Kathlyn Hendricks in their awesome book, The Big Leap. It describes an astonishingly prevalent form of self-sabotage that entrepreneurs are particularly prone to develop.
It’s a peculiar quirk of the human condition that, as much as we fear failure, we’re even more terrified of becoming successful.
Since success is the name of the game in business, your upper limit can be seriously debilitating. It’s important to understand how it is holding you back in your business, and preventing you from achieving that success.
What Exactly Is An Upper Limit?
Humans are hardwired to stay in their comfort zones. There are exceptions to this – individuals who thrive in new environments and actively seek out fresh situations whenever possible – but the majority of us stay within the realms of the ‘normal’.
The unknown is unfamiliar and, consequently, a source of danger.
Since we have such a highly developed sense of self-preservation, we instinctually interpret the unfamiliar as a threat. This isn’t because it’s necessarily threatening, but simply because it has the potential to be threatening.
The fight or flight response kicks in, and we hightail it back to a situation that is more familiar and safer.
In essence an upper limit is the limit of your comfort zone. Anything beyond that point and you’re in the treacherous territory of uncertainty, and you’re very likely to take action that allows you to return to safety.
This is usually an unconscious decision, so much so that we don’t even realise we’re doing it.
The end result, however, is the same whether we’re aware of what we’re doing or not: the closer we come to achieving our goals of health, happiness, success, or wealth, the more likely we are to sabotage our efforts before we reach the goal.
If you’ve ever picked a fight with your other half simply because you’re deliriously happy with them, and it’s totally freaking you out, you will know what I mean!
It’s like winning the lottery and immediately blowing all your cash on frivolous things.
Consciously you’re kicking yourself, furious and frustrated that you could be so foolish.
Unconsciously you’re heaving a huge sigh of relief, because you are back to safety in your comfort zone.
It doesn’t seem to matter how much we hate a situation, if that situation is familiar, our bodies fight to retain the status quo to the bitter end. It’s why so many people painstakingly lose weight only to pile it all back on. You may be healthier at a lighter weight, but your body doesn’t care, it wants to get back to the state it’s used to!
How Upper Limits Affect Your Business
Upper limits are annoying enough when we encounter them in our private lives, but in business they can have a serious effect on your profitability.
Entrepreneurship is all about the new and unfamiliar.
Whether you’re founding a business for the first time, creating a new product or service for an established business, shifting your focus to a new niche, growing your client base, or increasing your revenue and profit margin, everything is new.
Business growth naturally leads to an escalation in the level at which you’re working. At the very least, that level will shift and change. If your business is entirely static and never throws new situations and challenges at you, it has stagnated.
A stagnant business is not a successful business!
So constantly facing the new and unfamiliar is a great sign you’re succeeding, but it does present a problem, and that problem is your upper limit.
Do any of these situations sound familiar?
- You’re doing everything right, but nothing is working.
- You’ve got a great idea for a new product or service, but you can’t find the time to get it done.
- You’re working hard on growing your business, but you’re stuck at the same level of profit.
- You come down with a killer case of the flu at a critical time (i.e. the middle of a big launch, or right before a huge deadline), so things don’t go as well as they could have, or you miss your deadline.
- Your lead generation is off the scale and you’re signing more clients than ever before, but suddenly your existing clients are inexplicably leaving you.
- Your revenue is growing rapidly but your expenses are escalating even faster, somehow leaving you with less profit.
Believe it or not, all these situations are caused by upper limit issues and your own (unconscious!) self-sabotaging behaviour.
Once you understand the root cause of an issue, it’s a lot easier to put a proactive plan in place to address the problem.
To that end, here are three upper limit issues preventing your success, and how to fix them…
#1 You Can’t Break Through Your Income Limit
As a Profit Pioneer and money mentor I understand better than most that a healthy business should see growth in terms of income and profit year-on-year. It might not be a massive amount of growth, but the numbers should keep growing.
You become more efficient, retain more clients, streamline and perfect your processes…even if you’re not actively trying to grow your business, a successful business model will naturally grow over time.
In the early years of a new business, growth is often quite spectacular. Sure, the first year may only show a few thousand dollars in profit, but the second year is likely to be double, or even triple that as you gain traction.
The next couple of years generally continue to see big jumps, until you settle down into comfortable revenue range. At that point, any big leaps are a result of new product or service launches, or huge changes in your business model.
Even so, if there is one thing that should be guaranteed as an entrepreneur it’s that each year you smash the income level from the year before.
It may only be by a couple of hundred dollars a month, or a few thousand a year, but it’s still more money that you were earning previously.
Now, it’s probably never occured to you that more money could ever be a problem, but money is one thing guaranteed to make people uncomfortable whenever they hit a new level, at least initially.
As you grow accustomed to earning more, and the level you are earning regularly increases, it’s not quite so terrifying. Until then, every time you come close to increasing your income you run the risk of crashing into your upper limit.
If you’re struggling to hit your income goals and, no matter how hard you work your income seems to consistently hover at the same level, the problem is not your business, your clients, or anything else. You’ve run headlong into an upper limit and it’s preventing you from creating more success in your business.
Flip The Equation To Break Through Your Upper Income Limit
This can happen to anyone, at any time, and any level of business.
It’s more likely to happen to relatively new entrepreneurs, because they don’t have as much experience dealing with it. But the longer you’re in business, the more aware you become of your upper limits and how you sabotage your success.
Even then, an upper limit can hit you out of nowhere, right when you’re trying to make a big transition. Like, for example, moving from six-figures up to seven, or seven to eight.
I’ve seen a lot of people encounter upper limit issues around income. Some of them end up feeling they’ve come so far, and can go no further. It’s particularly easy to do this if your current level of income is high – it feels greedy to want more, and that is part of the problem!
But whatever your current level of income is, there’s no reason you can increase it, it just requires a little creative thinking to navigate around that upper limit.
The method I use to help my clients with their money management is called Profit First, and for very good reason. It’s a carefully chosen name that reflects the system’s core ethos, namely that if you want to improve the profitability of your business, you need to consider your profit first, rather than making it the last thing you think about.
Look at it this way, we all use a simple equation to calculate profit:
Yes, there’s a little more to it than this, but in essence the amount of profit you have in your business is the result of subtracting your expenses from the amount of revenue you generate in sales.
The problem with looking at your money this way is that Profit becomes an afterthought.
It’s not the aspect of the equation we can control, it is the end result. The only way to affect it is to change your numbers where sales and expenses are concerned.
Or is it?