Tuesday, April 24, 2012
You may find this unthinkable; Entrepreneurs, who run their business without knowing how much money they're making. It may come as a shock when I tell you that 89% of small business owners struggle with the financial control of their businesses. This is a shared challenge for start-ups as well as established companies with multi-million dollar annual revenues.
Can you imagine these same people not paying attention to the financial compensation if they were employed? Yet, when it comes to their own businesses, they are seemingly ignorant to what would naturally be of highest importance in any employed engagement.
After so many years of business advisory I have been observing this phenomenon and identified the following 3 key reasons why entrepreneurs shy away from the financials of their business:
1. They are scared that the profits do not reflect the amount of work they are putting in
2.) They fear that the financial performance is a direct reflection of their ability and own value
3.) They blindly trust their bookkeeper and accountant without overseeing, understanding and managing what goes on
I have some heartfelt, tough love for these entrepreneurs. If you don't take care of the financial aspects of your business, you may as well take a job!
The stress that this avoidance causes coupled with the inevitable demotivating factor why the hell you work so hard, will eventually catch up with you. Maybe initially the ‘ostrich’ approach will help ignore the true facts but soon anxiety and fear will creep up. Then a situation will cause you to HAVE to look at things and will send you into a tailspin!
Therefore I teach my clients to make understanding the finances their first major priority. This may well be a little unsettling at first but once you know and start taking control, the power you will gain over what goes on in your business as well as the peace of mind that comes with the knowledge soon turns unsettledness into empowerment.
Once you declare control over your finances you will truly enjoy being an entrepreneur. You will clearly see what works for your business and what should be improved. And even more so, you will finally get to imagine how big this ‘baby’ can grow!
Ready to take your head out of the sand and face your finances full on? Then it’s definitely time to give me a call.
Together we will not only tackle the present but plan the attack for future profits.
Can’t wait to show you the incredible power of being an excellent money manager and the returns you can expect from turning your passion into profits :-)
Yours in tackling business challenges,