Last month I did an experiment with some of my clients to see who was actually looking at the financial statements that I send them every month. I discovered that only 15% of the clients looked at their financial statements. I’ve heard all sorts of reasons why they don’t look at them and have even had many clients obviously lie to me about looking at them. Many business owners are scared for a variety of reasons to look at the financial situation on a regular basis.
Ask For Help
The first step to building a better relationship with your finances is understanding them. You can search online, watch videos, and read books, but I recommend finding a teacher that will help you one on one. Every business is different and every owner is different. You need to find someone who can help teach you at your level and answer your specific questions so you can get a full understanding. You need to understand how to read financial statements and you need to know where the information is coming from. While there are very few business owners I recommend doing their own bookkeeping, I think it is extremely important that every business owner understands the data that comes from bookkeeping.
Get To the Root of Your Fear
Everyone has a very different relationship with money, but there is always an underlying reason why. I grew up in a family of entrepreneurs and learned that money can be very powerful. Understanding where money was coming from and where it needed to go on a monthly basis help me create a relationship that revolves around knowledge. I learned that your business, household, and life in general are run best when you understand your finances and use them. This seems to be a very different relationship with money than a lot of business owners I work with. Many people have a large fear around money and therefore avoid analyzing it. These seem to be cause by many different sources including the fear of failure, the fear of not being the best, the fear of looking uneducated, and much more. What I have discovered is until the root of the money issues is discovered and dealt with, the money blindfold will not fully come off.
Understanding your finances as a business owner can be one of the biggest assets a business owner can have. You are able to confidently make decisions using your feelings and facts. You feel more in control of the direction your business is going, you have more confidence as a business owner, and you ease a huge stress. I teach many business owners the basics on how to read financial statements. With even just a small amount of knowledge they they become so excited to learn more, throw away the blindfold, and take control!