Whenever the issue of health is mentioned, peoples mind quickly reflect on diseases that affects human body. Well, in as much as this is a natural response, the fact still remains that our finances can be sick and can be in a very bad state of health if we fail to keep an eye on it.
Folks take out time off work and other engagements to go for medical check-up which is a very nice thing to do but how many people have that spare time to do some personal finance health check-up? From the interactions I have had with small business owners I have worked with, only very few entrepreneurs employ best practice of small business personal finance. There are many business coaches out there that are willing to allow you leverage on their experience as start-up owner.
This article is not written with the intention of teaching you the basic of personal finance. There are millions of books and articles that have been written on personal finance management. The aim of this article is to challenge you as an individual to take that bold step of going for your personal finance health check-ups.
The good news about financial planning is that it is very easy to access and implement. You might not even need a financial planner to baby sit you. The only problem is that we just don’t care. I recently read an article about the importance of having personal loans. The author of that article dwelt more on encouraging people to take up loans and never mentioned the importance of doing some basic analysis to see if you really need that loan or not.
Small businesses no doubt do need to have a level of debt in their capital structure but they can still run their businesses profitably without relying on borrowed money.
My experience as a business turnaround consultant has shown me that many small businesses struggle not because the business idea is not a plausible one but because the owners lack the basic financial management literacy that is required to succeed in business world.
Many small business owners still don’t understand the importance of accounting and working capital management in the overall management of their enterprise. Disproportional attention is given to developing business model at the detriment of the finance of the small business.
If you lack the financial expertise of looking after the financial health of your business, it will be a worthwhile investment to engage the service of a small business planner who will continually look after your finances as a small business.
Think of your business as your child. Will you rather allow your child to die or consult a physician when your baby is sick? It is a grave mistake to take your sick child to a lawyer or a qualified accountant but, many entrepreneurs seek financial help and advice from people who are not qualified (experience and education) to give such advice.
My investment accountant always warns me to be wary of cheap advice. The problem with cheap advice is that it often cost more than you had saved.
Like I said at the beginning of this article, the purpose of this write is not to educate you on the intricacies of managing your finances but to motivate you into taking positive actions that would ensure that your small business finance is in a sound and stable financial health.
I hope you are challenged by this post to take action which will ensure that the financial health of your small business stays in good condition. The statistics of failed small businesses is already staggering, so don’t add to the number.