The biggest finance-related worry for small business leaders is managing cash flow. Nearly three-quarters of those surveyed cite this issue – as a key concern. There are five key issues affecting small business owners the most:
- Managing cash flow
- Being as tax efficient as possible
- Understanding the profitability of the business
- Not having an up to date picture of business performance
- Raising finance for growth/expansion
A UK study surveying small business leaders showed that over half (53.6%) of small business owners believe they routinely suffer from sleep deprivation as a direct result of finance-related work worries.
While there is strength in numbers within bigger organisations, small business leaders have fewer colleagues to share their concerns with and exchange potential solutions.
Of those who said they are routinely sleep deprived, more than one in eight say that their concerns interfere with their sleep most nights. The more finance-related concerns a small business leader has, the more their sleep suffers. Having three or more such concerns typically, results in them losing sleep up to once a week. Not a healthy space.
So what solutions could help you sleep better at night?
It’s not all bad news. The survey showed that small business leaders are proactively seeking solutions to their finance related work worries – with certain tactics appearing to be highly successful, including;
- Asking their existing accountant to do more – minimising tax efficiency was a close second to cash flow as the most worrying issue for business owners. Consider meeting regularly throughout the year to help understand and interpret data and exchange ideas for business growth, as well as discussing complex issues such as tax advice. Your accountant can be your virtual CFO, sitting at your right hand and working with you to achieve your goals and keep you to task.
- Taking on more financial oversight, personally – effective financial management gives you tools to chart your course into the future, adjust your direction when needed, and help you find your way through challenging times. It’s your business so you need to take ownership, be accountable and responsible. Keep focused on the dashboard driving your business and seek advisors dedicated to assisting you.
- Moving to an online/cloud-based accounting system – this tops the list for alleviating finance-related concerns. Having up to date management information and an accurate handle on profitability throughout the year (instead of just at year-end) gives a clearer idea of present and future cash positions. Xero is an excellent cloud-based system option.
- Employing someone full or part time – using accountancy services more, rather than doing everything yourself, can leave you free to focus on what you’re good at (and most passionate about).
- Changing accountant – typically old school accountants don’t help manage cash flow. Look for an accountant willing to work with you proactively throughout the year and embrace new technology.
By pro-actively tackling their finance-related concerns, business owners are not just getting a better night’s sleep; they’re also able to deliver more growth within their business.
There’s a saying “You don’t drown when you find yourself under water…you only drown when you stay there!”
Poor cash flow is only ever a symptom of something else that is going wrong – focus on the cause to fix this easily and permanently. Follow Trish’s five simple financial action steps for both your business and personal life. Remember, the only reason most people don’t have a good financial situation is because they don’t DO the steps suggested.
How about you?
What business worries keep you awake at night? We’d love to hear your feedback, to establish if NZ business owners really do align with the UK survey. Please contact us with your comments and feedback.
We have heaps of business tools and workbooks available to help you run your business.