Running a business does not just put pressure on time, it also puts pressure on finances.

 

A study from Haines Watt in the UK shows how difficult it can be to balance the financial needs of a family with the financial management of a business. The sample of business owners interviewed is wide enough to be statistically representative, and I believe that the numbers would be more or less the same in most of the countries I work with:  this is why I am sharing my views about it with you.

Based on this study, almost a third of business owners have delayed or cancelled significant investments in their business because of the need to draw a personal income. If you assume that it is due to a high proportion of inexperienced business people or micro businesses, we are talking about businesses turning over more than 1 million GBP and employing more than 10 employees.

As you see and have probably experienced yourself, in many cases, a decision to invest is not merely driven by figures and financial statements in a rational way. There are many other things deeply personal and unconscious, pushing a business owner to do something (or not to do it, depending on which way you look at it).

45% have commitments that would make it difficult for them to reduce the income they take from the business they run. 

Let's be honest: when was the last time you or someone you know found himself or herself between a rock and a hard place, having to choose between a lower lifestyle or an opportunity? Should I grow the company and take a long term approach? How do I deal with the pressure coming from my family and personal circumstances? This is a dilemma lot of us who have been in business for a few years will relate to!

The pressure is actually even heavier than it looks, when you consider that in 75% of the cases, their spouse also works in the business or has no alternative income of their own.

 

Planning and forecasting are important. Armed with forward-looking elements, owners can take informed decisions. With my background in invoice finance and cashflow management, I will never say the opposite. However, I have learnt that the numbers I see in a software or a piece of paper do not tell me the full story. Most of the entrepreneurs I see are very smart, very capable, are given very good advice by accountants and advisors. They know what they rationally should be doing, but something is stopping them. That is where someone with a background in Finance, a good understanding of human behaviors and business acumen will add tremendous value by finding the root of the behavior holding the entrepreneur back and dealing with it.

Personal success and business success are deeply intertwined, and it is sometimes (not to say often!) impossible to feel successful in one, if you feel like you are failing in the other.