Every business owner is different with their own unique style. But they all have one thing in common – the finances will be fundamental to the success of their business.
Depending on their personality, however, they will all have a different way of approaching financial management.
From our experience of working with various business owners, we have identified three key types. Do you see yourself in any of these?
The fantasist – is great at coming up with the next Big Idea and is full of creativity and vision. While this may be good news for the business, it might not be the best approach for the finances. This type of person will tend to make decisions based on gut instinct and intuition rather than looking at the hard data or evidence. The danger can be that, without a sound grasp of the figures, those brilliant ideas may never stand a chance of becoming reality.
If the fantasist sounds a bit like you, it’s a good idea to make sure you have someone else in the business who can provide some balance and rein you in from time to time. Enjoy being a visionary by all means but make sure you have a ‘detail merchant’ on board as your financial director or accountant too!
The gambler – loves an opportunity and is to be applauded for their spontaneity. On the positive side, this entrepreneurial business type can make the most of their circumstances at the right time and get ahead of the competition. However, their impulsive nature can also lead them to jumping in without thinking and taking the business in a direction that may not be the best financially.
If you’re someone who is always spotting the next ‘golden opportunity’, make sure you have someone who can manage your financial data accurately and can present the figures to you right away so you can make informed decisions.
The disorganiser – we’ve no doubt all come across business owners like this. Their office is the hub of the operation but it’s often a veritable Aladdin’s cave, piled high with stacks of paper. Financial management is not a priority for them but rather something that gets in the way of the operational side. It’s only when they need to find that all-important receipt that they will turn their attention to the neglected paperwork, panicking over every other invoice and bill they come across as they search.
It doesn’t mean they’re not a good business owner, just someone who needs a good accountant to keep things in order.
So which are you most like?
If you recognise certain traits of any of these in you, are there things you could do to change your approach? Or could you get others in the business who are of a different temperament to provide some balance?