Business owners who fear dealing with the financial management of their small business – it’s more common than you think. Having a fear of finances is problematic when you run an SME, as it can lead to all kinds of issues, like being afraid to spend money on the business to, well, going out of business. At YourCFO we come across this phenomenon quite often, so we thought we’d unpack it. What causes a fear of finances? And what can be done to overcome the fear? Read on for the answers…
A fear of finances – where does it start?
According to the book Finance Without Fear: A Guide to Creating and Managing a Profitable Business, many people are terrified of numbers in general. A numbers phobia can be the result of anything from not enjoying maths at school to a learning disability called dyscalculia (dyslexia, with numbers).
Plus, many business owners have fundamental gaps in understanding when it comes to financial management, such as ratios or percentages. To add to the confusion, there’s a big difference between accounting and finances. Accounting is the recording-keeping and input of numbers. Financial management deals with the meaning behind the numbers and how to use the information. Most people don’t know the difference. And when complicated terminology is thrown into the mix, it causes them to mentally shut down.
How to overcome a fear of finances
If you are a business owner it’s so important to get a handle on your SME’s finances – if you don’t, you could face massive financial risk. Many business owners subconsciously know this, yet the fear causes them to ignore the problem: after all, ignore a problem long enough and it’ll go away, right?
Unfortunately that’s not how it works. The first step is to brush up on the basics. You can do a short, introductory course in accounting, or watch some YouTube tutorials. The information is out there, you just need to face the fear, head-on.
Overcoming the fear also involves taking a more proactive approach to your business’s accounting and finances. Even if you have an accountant or bookkeeper, it doesn’t hurt to take some time to just understand the fundamentals of what they do.
Get a professional on board
A qualified professional can help to understand areas you need to focus on in the short-term. And to set longer-term financial goals for your SME. As your business grows, it not only gets riskier to ignore the finances, but it also gets harder to go it alone. Having strategic financial guidance is invaluable for the growth of your business, and that’s where people like us can take the wheel.
YourCFO not only provides affordable accounting and bookkeeping retainer packages geared towards SMEs and entrepreneurs, but we can also help you re-look your business’s finances to see what’s working and what isn’t.
Many business owners have a very real fear of finances. If you’re one of them, YourCFO can help. Don’t put off getting your SME’s finances and accounting in order – contact us today to get on track and take control.