Why Small Business Owners Should Loan Time to Understanding Financing
Small business owners have a lot on their plates constantly, juggling the various responsibilities that keep them occupied throughout the week. For this reason, many small business owners will hire accountants and separate themselves from their business financing situation. In a recent article from the Daily Herald, Dave Gay speaks on small business owners, saying that one of their biggest problems is an aversion to the numbers behind their business, as well as a lack of clear planning for the future when it comes to their retirement and the next stages of their business. Business owners who remove themselves from their financial situations, even in the name of spending more time running other aspects of their business, are doing themselves a disservice and potentially driving their business into hard times down the road. Here is a short list of things that small business owners should do in order to loan themselves a clear understanding of their financing situations.
Have a meeting with your accountant, lawyer, and other partners. The purpose of meeting face to face with all of the people helping you run your business is to get a holistic sense of where your business is at. It can be confusing for business owners to hear one thing from their accountant and another from their lawyer. What needs to happen at least once every few months is for your whole team to really lay out where the business is at and why.
Make plans in advance. Retirement is the goal of every business owner after a certain point, and it is something that should be flawlessly planed. Why leave any loose ends in play regarding your golden years? Small business owners should begin planning their retirement at least 5 years in advance of the date that they plan to retire. This will ensure that they are able to take on all the necessary preparations with ample time to spare. Begin the training of replacement managers, the cutting of unnecessary overhead and improvement of the storefront while you are still able to do so, so that when it comes time to punch out for good, you will be leaving behind a healthy and functioning business.
Most importantly, don’t be timid when it comes to asking questions about business financing. You owe it to yourself to get more involved in the financial side of your business. Ask questions, figure out the real ROI on your programs, and listen to both your financial advisors and your instincts. Your business is your legacy, and it does not pay to be intimidated by aspects of it that you find difficult to understand. Best of luck, and remember, there is nothing wrong with not knowing much about financing, as long as you are willing to learn.
Photo Credit to Photosteve101 on Flickr