The more I coach business owners, the more I realise that most small business owners have a fear of their own financials. Let’s face it, the unknown is spooky… and so is being in the dark. But fearing your own financials is like fearing your own shadow Your financials are a reflection of your business, they belong to you, and they are not going anywhere.
I am currently coaching a group of young business owners in an incubator in Botswana. The investors in the programme asked me to present a course on financial modelling. Within the first 30 minutes I realised I had scared the pants off them! The big eyes staring back at me told me that we needed to go back to basics. You see, just because you are good at what you do, doesn’t make you a great business owner. It simply makes you a great employee with a skill set. If you want to OWN a business, you have to have at least a general understanding of the numbers that drive your business.
Why you need to face your fears
- Your financials are important because they ignore the soft issues and lay out the cold hard facts about your business.
Financials are a global language – they allow you to communicate with your business, and give shareholders, investors, funders and potential business partners an opportunity to investigate the feasibility of doing business with you.
Regular close examination of your finances leads to effective billing, collecting and paying, and by extension, improved cashflow.
By ignoring your financials, you wonder around in the dark and won’t notice those nasty surprises lurking around the corner. Trust me… the consequences are much scarier than taking the time to understand the numbers that drive your business.
The outsourcing debate
- If you leave your financials to someone else, they could cheat, steal from you, pull the wool over your eyes or stab you in the back.
While outsourcing your finances frees you up to spend time working on and running your business, you will never fully understand the nuances of your business if you don’t regularly check them.
When you outsource your financials to an accountant or bookkeeper, you merely get to record historical financial information that can only tell you what position you are in today.
Once you face your fears and understand your financials, you can use your unique business knowledge to interrogate your numbers, which will help you make better business decisions with confidence.
Fear is borne out of ignorance. If you are serious about taking your business to the next level, you need to take your financial knowledge to the next level. Leave the scariness to Halloween, and let me hold your hand through the process of facing your fear of numbers. Let’s chat