Financial coaching may seem like an unnecessary luxury, but it’s the key to growing your business and having a good time while you’re doing it. Here we break down down the four signs that show you need the know-how and support of a financial coach.
1. You suspect you’re a bad business owner
In the deepest recesses of your business, you have a dirty little secret. Or maybe two. Maybe it’s about how much cash you waste on coffee every month, how messy your books are, how much you’ve let your overdue invoices slide or how much debt you’re carrying.
So you keep chugging along. You put a brave face on it. You ignore the letters from IRD and the creeping feeling that you’re not really cut out for business ownership.
Imposter syndrome is very common – especially for women – and it tends to whittle away confidence even in areas where you are extremely proficient. For most business owners, this feeling of inadequacy has little to do with them, and everything to do with the support they’ve been getting from their accounting team. Unless you’ve completed a degree in accounting and bookkeeping you are, out of necessity, feeling your way. While that was fine when you first started out, as your business grows, financial decision-making and management become more critical. A good financial coach will get to know your priorities and goals, and help you set processes in place to achieve those. They’ll be able to offer advice for managing your accounts, establish reasonable budgets, and help you stick to them.
2. You don’t have goals broken down into daily tasks
We all know goals are the key to success. That isn’t rocket science. What is tricky is working out how to achieve those goals. Anyone who’s trained for a marathon knows that’s the secret. Little by little, your efforts will build up and take you to a place that you’d only ever dreamed of before.
But that only works if you’ve clearly defined the goals that you really want, and then broken them down into bite-size chunks – ones that you can tick off every week or every month as part of your ongoing operation. That will often require a bit of specialist knowledge (or at least some complicated maths).
A good financial coach will help with all of this. They’ll start by helping you tease out the goals that will really motivate you. They’ll then work backwards from those goals to help you define what that looks like day today. For example, if your goal is a new home and a European holiday every day, great. What does your business need to do to support that? Maybe you need to grow your team by 50%, but how much more revenue will you need each month? And what does that mean for your tax obligations? What other detail should you consider, such as extra equipment and office space, HR resources or training time? And what are the daily tasks or measures that will help you stay on track?
Then your coach will keep you honest – checking in to make sure you’re still focussed, and that the goals are still what you really want.
3. You’re feeling constantly worried or overwhelmed
Before you can believe in dreams, you have to make sure you’re not living a nightmare. While you’ll never be totally free from concern, getting a handle on the things that genuinely keep you awake at night will dramatically improve your life – and your business. For many people, that's about cash flow – not having the money you need to meet your obligations. For others it’s worrying about their team, their workload, making sales or meeting deadlines. While a good financial consultant can’t give you HR advice, or how to market your business better, they can help put things in perspective, guide you to create an action plan, and put processes in place to move you forward without as much stress. It will give you clarity about what things really will make the difference in your business.
4. You always have empty bank accounts
Cashflow is a pain in nearly every business owner's backside. Your books look lovely and healthy and meanwhile, there's a tumbleweed blowing through your current account. You have no money, and yet, there’s the profit showing on your bottom line. Where did that money go? Did you go on a sleep-shopping spree? Has someone been syphoning it off? Have you been blowing it on coffees?
Your profit is there somewhere – and a financial coach will help you find it. It’s been spent on debt, is tied up in an asset you can’t sell, or is sitting in the bank accounts of your debtors. Where ever your cash has gone to, getting it back is the name of the game. Again, having clarity about what’s actually happening is the first step. Next, your financial coach will help you put some strategies in place to get that cash flowing. That might be to set up a debt recovery process, access cheaper finance or free up capital from an asset. Your coach will also be there to make sure things are ticking along, give you a prediction of what you’ll have in the accounts next month, and guide you on what to do next if things don’t look great.
There’s a reason why big businesses have CFOs – even the top business people need someone else to keep their eye on the numbers. It's their job to make smarter decisions about money, so the company can get on with the job. That's the same for your business. With a financial coach, you'll get clearer on your goals, make more money and – importantly – have more fun doing it. When bundled in with your bookkeeping and yearly compliance costs, you'll be surprised at how cost-effective this kind of support can be – especially when you realise how much it will add to your bottom line.
To get your business rolling, talk to Thrive CA’s coaching team today on 09 296 9122.