As a business coach, I’ve had an opportunity to see behind the scenes in a lot of businesses. One area of concern (and sometimes shame or embarrassment) for a lot of business owners is the financial side. I’ve had owners confide to me things like: 

  • I don’t think I can make payroll next week
  • It seems like we should be making a lot of money, but my bank balance isn’t reflecting it
  • The bank just called my loans and I don’t know what to do
  • My business partner wants “out” and I don’t have the cash to buy them out
  • I get financial statements from my accountant, but I don’t understand them - I just file them away

So if any of these things are true for you, the first thing I want to say is that you’re not alone.

Many small business owners think about money in terms of having enough of it or needing more of it. They think about increasing sales, seeing more profit, and seeing an increase in the ROI of their marketing expenditures, but they’re often not sure how to get there. 

Most small business owners don’t have a background or education in finance. As one of my clients put it: “they don’t teach this stuff in grad school.”

See, people are driven to start a business and they get satisfaction from that business because they have a distinct passion or talent for their craft. But how often are small business owners sitting down and diving into the financial side of their business? When they are, are they truly comprehending and learning from the data they’re given? If financials and reporting are aspects of your business that you find yourself uncomfortable or unfamiliar with, then it’s time to shift your thinking from seeing yourself as ‘someone with a job’ to ‘someone who runs a business’. Step one in that shift is to get help from a trusted advisor, and no, that advisor is not your accountant.

The small business world is poorly served by the accounting profession.

 

Now, that’s not to discredit or discount accountants, they certainly play a role in helping small businesses with bookkeeping, taxes, and producing financial reports. But the accounting profession is not built to deliver everything that a small business owner needs in order to succeed. They aren’t there to give you advice, they are there to give you the numbers as they see them. To put it one way, if you look at any large corporation, they have designated roles within their senior management to ensure that finances are handled and understood, but those job titles are not “Accountant”. Large companies have CFOs and comptrollers who have years of education and experience in analyzing financial data and translating that data into actionable insights. So, we’re left with a situation where a small business owner who lacks formal business and financial education hires an accounting firm to keep the books, file their taxes, and provide reports, and quickly becomes accustomed to thinking that’s what they get from their accountant, so that must be all they need. 

 

Operating under the assumption that your accountant’s financial reports are straightforwardly telling you everything you need to know about your financial situation is essentially operating blind and has landed many of my past clients in over their heads and losing money, fast.

 

Small business owners can close the gap between what accounting firms (or do-it-yourself solutions such as QuickBooks) provide them in terms of reporting and the level of understanding that is actually required to move the business forward by seeking business advice from an advisor, i.e. a fractional CFO. In fact, if you are in the ballpark of $1 to $2 million per year in revenue, a fractional CFO level advisor is a necessity for you. These advisors are able to see the accountant’s reports from a business perspective, instead of just a numbers perspective, and then give you the intel you need to make decisions. One way this is done is by doing a common size analysis which allows you to see your business’ performance and expenses in a way that compares them on an even playing field - like comparing apples to apples. Accountants, as well as software such as QuickBooks, do not readily show this information, because it’s not their job. In fact, QuickBooks is one of the most popular financial software among small business owners and yet doesn’t allow for a common size analysis beyond one year. It was designed by accountants, for accountants, not for helping small business owners to run their businesses.

Think about this: would you drive a car without a dashboard? Without a gas meter? Without a speedometer? No, you wouldn’t. So why would you operate your business without a proper financial dashboard and someone who can clearly, concisely, and accurately help you understand what that dashboard is telling you?

 

It’s OK to ask for help and a good business coach won’t judge.

 

It’s understandable that many business owners are uncomfortable, nervous, or self-conscious about reaching out and admitting that they aren’t in control of their finances and don’t know how to move forward. As difficult as it can be to reach out, a business coach is your number one asset in these situations. Business coaches are there to listen, not judge, and offer guidance and support, including help sourcing the right individuals to add to your team in order to regain control of your financial situation.

Let me tell you about a client of mine, Darren. Keep in mind that during my business coaching sessions, everything is confidential, and the following information comes from Darren willingly and openly sharing his testimonial. When we started working together, Darren was having trouble making payroll. He was working with a bookkeeper who was not seasoned nor trained enough, and not looking at the finances from the perspective of running the business, thus not giving Darren the right information. During the first two years of us working together, Darren learned how to understand his reporting, we set him up with a new bookkeeper and found him a fractional CFO to advise him and keep finances on track. His company is now making all-time record sales quarters, and Darren is even thinking about buying out the building he has been renting from. That’s enormous growth, all because he accepted what he didn’t know and reached out for help.

 

So reach out. You will learn at the pace that works for you, and I will be there to help you the entire time. Your business is still your business, you make the decisions, as a coach I am a guide there to help you learn, open your eyes to possibilities, think more critically, as well as to give you vital access to resources and people who can help you take control of your financial future. Coaching, as well as hiring the right team to handle your money, is an investment. With better information and guidance you will have a business that performs significantly better than it did before. In fact, I’m willing to guarantee that within four months your coaching investment will have paid for itself, I’ll even let you set the terms for what that means in the context of your business. Out of almost 300 coaching clients, only one has ever questioned me after four months.

Book a complimentary 15-minute consultation call with me at timewithjohn.com. In those 15 minutes, we’ll find out if you are good to go on your own or if you could use some help. My goal is always to help you get the things in place that are going to help you have a better life and a better business.