Fear and anxiety have a way of stopping us in our tracks. Worry can make it hard to make even the simplest decisions. And compounding stress can sap joy from our favorite tasks, activities, and relationships. We all understand how mental wellbeing impacts our ability to live fulfilling lives. But what does it have to do with running a business?
Anyone who willingly invests their time and capital into a business of their own learns that they must manage stress wisely so they can stay on top of their responsibilities. The weight of their decisions is multiplied by the pressure to succeed and the needs of everyone around them who rely on steady work and wages the business makes possible. Honestly, stress is to be expected for business owners. For the most part, they are up to the challenge. But that stress, when it is amplified by unknowns and uncertainty, can stifle a business owner’s ability to focus and make fact-based decisions.
I’m going to start with the little things because these principles will carry over into financial management and awareness. Before I sit down to open a single email, I make sure my desk is clean. If the space around me is cluttered, that disorganization could impact my thoughts and mental state. So I organize my space, then I organize my thoughts.
If my email inbox is overflowing, I get caught up. I take note of everything that needs to be done in response to those emails and reply as needed. These practices have become a part of my daily routine because of the significant impact they have on my state of mind. They allow me to clear my workspace and start fresh, offering complete focus to everything I do.
Most business owners I’ve worked with have a firm grasp of their priorities. Mental wellbeing tends to decline when our most urgent and important issues remain unresolved as deadlines loom and bills are due. Another contributing stress factor is uncertainty. Even as you operate your business according to plan, major “unknowns” have a way of introducing doubt and worry to everything you do.
In other words, your ability to maintain a healthy state of mind depends on your capacity to eliminate whatever unknowns you can, prioritize according to what you do know, and execute a plan that you can be confident in.
You’ve been told to “expect the unexpected,” but how does one actually do that? It doesn’t mean running down to the basement every time you see a storm cloud. It means knowing where to get the information you need to make the right choices. Or in this case, you know the sound of a tornado siren and respond accordingly.
When it comes to business, financial awareness serves as a bedrock for planning and knowing your warning signs. An effective strategy must be based in sound financial performance data. Good strategies are also flexible. But you can’t develop or adapt your operational strategy without the right information.
Commonly, business debt can tower over our thoughts. Do you see a way out? Are there ways to refinance your debt that would better serve the business? Seen through the light of financial awareness and a workable repayment schedule, suddenly business debt isn’t so scary.
One of the most powerful tools Advantage Insights offers its clients is the ability to fully understand the profitability of their businesses. Each product, project, or service can be broken down into its individual costs and income. As you can imagine, this kind of information impacts everything. When pricing adjustments are needed, you will know. If a particular client is demanding more of your time than expected, you’ll see exactly what that means to your bottom line.
Staffing and retention are other potential sources of stress for business owners. Nightmare personnel scenarios aside, even the best teams can bring stress to a business owner who is constantly concerned with keeping their people happy and on-mission. Operators who know the granular details of their financial performance are better able to hire and keep quality employees. No one wants their hard work to go unnoticed. When employers are positioned to confidently give raises according to performance, their people feel that their work is recognized and important to the business.
Throughout my career, I’ve learned a few reasons why people avoid thorough record keeping and financial management. For one, they view it as a source of stress. Thinking about money isn’t always fun, especially when you see red ink or the numbers simply don’t make sense. But here is the most important point, and I really want this to sink in:
Good financial management and awareness will always help you reduce stress in the long run.
I admit it is not always fun to clean up your books and implement better processes for financial management. This is especially true if financial management concepts are foreign to you. A detailed profit and loss statement won’t offer you anything if you don’t understand everything it’s telling you.
That’s why it is so important to work with financial management professionals who:
It can be nearly impossible to find a financial management partner who can scale their services to address your unique business needs, but it might not be difficult for you. That’s because you’re reading the Advantage Insights blog, which means you are one click away from getting the conversation started.
I can’t tell you everything you need to have peace of mind in your life. But when it comes to business financial management, many of your greatest fears are hiding behind a veil of uncertainty we can help you remove. You can find out what it means to plan with confidence and find out what changes could benefit your business most today.