Episode 235: Debt Doesn’t Have to Be a Dirty Word with Danielle Hendon
Does it freak you out to even think about possibly going into debt? If so, you're definitely not alone. Our thoughts tend to jump to the total due and not the monthly payment or the possibility of short-term use. Today's guest talks about how you can start to switch your money mindset around the debt you may already have.
Danielle Hendon is the founder and owner of 4 Corners CFO. She's an accountant that helps business owners understand both debt and their money mindset and then obviously how to grow and expand.
If you love running your business, but you're not always so sure about the financial piece, today's episode is going to help you relax and give you great ideas.
Delving into debt and accounting
Danielle says her origin story goes back to being a music major in college. Her English professor had the class write about the future of their career and she realized the future of a music major was not going to support her financial habits.
But she had friends in accounting and decided to try it out. She loved the auditing side of accounting, and loved everything about it until she started a family. A newborn and 80-hour work weeks did not mesh.
“I will admit, when you love what you do, you do it a lot,” says Danielle. “And I was a workaholic and a mom, and being home with my kids and becoming the one that had to get them to school, I had to get them to swim. I got to know the friends and the parents and the teachers and the coaches, and I didn't want to give that up.”
When it became clear that the company she was working for would close, Danielle decided to take a leap of faith and put flexibility and family over finances. She was able to connect to another business owner who does fractional CFO work, who was very transparent and honest.
Now, Danielle brings big business financial concepts to small business owners. And on the other side of it, being able to be a business owner that grows a business, Danielle helps other accountants like her that love what they do but don't necessarily want to hustle hard.
“Yeah, we want to be there for our family. We want to have the flexibility, but we are still really smart women that can do an amazing job,” she says.
Money mindset shift on debt for business
Danielle says if she could gift entrepreneurs a money mindset breakthrough it would be to believe in themselves. Your belief in yourself is going to tackle the limiting beliefs. It’s going to tackle your concerns about debt.
“[Belief] gets into the nitty gritty, the pricing you are worth, what you're pricing. You're giving more than I bet you're charging for,” says Danielle.
Trusting yourself means trusting yourself to make good decisions and also breaking through the limiting beliefs, telling yourself things like only the guilty are rich.
Normalizing debt for business
Danielle wants to start by normalizing how she thinks a lot of us view debt. The narrative behind debt has a really negative connotation. It's built around the unintentional and habitual use of debt, rather than being built around the intentional and purposeful use of debt.
A lot of us may have a credit card that we swipe consistently, and hopefully are paying off. But if you're not, you probably do fall into that unintentional habitual use of debt. And it's so easy to just swipe and get things done, but then you have this growing number that feels like a burden, and it's heavy, and it's hard to carry. It becomes this weight that creates anxiety and stress, and it just adds to that negative connotation behind debt.
“I want people to switch the narrative to understand that that negative connotation comes with the unintentionality. It has nothing to do with the debt itself. Debt is just a tool that can be used in good or bad ways,” says Danielle.
That intentional debt could be the thing that launches your business. You cannot start a business without money. It's going to take time to get clients in the door. It's going to take time to get marketing up to speed. That is not a bad thing when it's intentional and it's planned for, and you know how much you're going to need to launch and be successful.
If you’re risk averse, you might start small and show yourself the facts. Run the numbers. Take the emotion out of it and deal with pure data. Then let yourself add a little emotion back in to motivate you to knock those payments out even quicker.
Clearing credit card debt
If you are someone feeling bad about your debt, looking at it and making a plan will help. Danielle says usually the debt that makes us feel bad is credit card debt, because you see a growing number with high interest rates.
Danielle says if you have credit card debt and you feel like you’re drowning, look into a term loan. It’s like a car loan. A term loan with a doable monthly amount over, say, five years.
Over the course of those five years, you pay off that credit card debt. You build the habit of paying the credit card every month and what the payment will be every month. It's not going to grow. It's not going to change. It's a steady number to cover. Predictability and control matters.
“When you are feeling like you're drowning under credit card debt, you're not making your best decisions. You're scrambling to get money in the door because you feel like you're climbing a 50,000-foot mountain every single day,” says Danielle.
Hiring your first employee
When it comes to growing their business, Danielle says hiring that first employee is always a good investment.
There is usually a fear around the ability to make payroll, which she says comes back to the importance of having a budget and a plan. She suggests a line of credit is a good way to counter that fear, as it will take three months to get an employee up to speed.
“I will say 90% of the time hiring an employee is almost always the right decision when they are a revenue-generating employee,” says Danielle. “Usually, your first hire is somebody to help do the doing. […] And then you free up space to grow because if you are the only one doing the doing in your business, you cap out real quick.”
Free gift for listeners
Don’t just guess where your business is going this year, tell it where to go and make a plan that can help. Listeners are invited to connect with Danielle.
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