Common Mistake of Business Owners: If you miss this important step, you’re setting your business up for failure

Common Mistake of Business Owners: If you miss this important step, you’re setting your business up for failure

As a business owner, you can’t afford to be in the dark when it comes to your numbers.   You need to be able to understand what they’re telling you so that you can make informed decisions about your business.

But I get it – numbers can be confusing. They don’t always make sense, and it can be hard to know where to start.

Ricky was never one for numbers.  In fact, he found them incredibly boring.    The only time he ever really thought about numbers was when he was checking his bank balance.  As long as there was money in there, he figured he was doing alright.

So when Ricky decided to start his own business, the last thing he wanted to do was sign up for some boring accounting training.  After all, wasn’t that just another way for his accountant to make money off of him?

Ricky was in the zone. He had a new business, it was doing well, and he felt on top of the world. He was so confident in his success that he didn’t even bother to return his accountant’s calls.  He figured that everything was going so well, there wasn’t any need to.

Ricky continued to make financial decisions without consulting his accountant- he invested in getting more staff to help with operations and brought in new equipment. He also paid a deposit for the new location he was planning on opening. It all sounded great on paper, but Ricky was soon to learn that he really had no idea what he was doing.

A few months later, Ricky’s business started to tank. He was losing money left and right, and he had no idea what to do. In a panic, he called his accountant- the same one he had been avoiding all this time.

It turns out Ricky’s accountant had been trying to warn him all along.  If Ricky had invested in the financial awareness training that his accountant had offered at the beginning, he would have known that he was making some critical mistakes.

Don’t be like Ricky- make sure you understand your business finances from the get-go. It could mean the difference between success and failure.

I love to see entrepreneurs like Ricky take something they believe in, no matter how crazy or impossible it may seem at first and create a business out of nothing.

But too often, and I just hate to see this, is these same business owners end up making the same mistake that Ricky did and end up failing because they don’t have a handle on their numbers and fail to invest in training and a relationship with their accountant.

One of my favourite sayings is, “if you think it is expensive to hire an expert – wait until you try doing it yourself”! Don’t let a lack of understanding your numbers be the reason your business fails.

That’s why Insight CA is on a mission to help business owners become the master of their numbers,  so they can make informed decisions and ultimately succeed.

If you’re like Ricky and need help getting a handle on your business finances, we offer financial awareness training courses that will give you the confidence and skills you need to make sound financial decisions for your business. Click here to get in touch today to find out more.

When you have insight, your numbers will grow!

Want to know another fatal mistake business owners tend to make? Click here to learn about Matt’s experience and how one simple thing marked the end of his business.

Are you struggling to make your business work?

Insight CA Limited is a team of experienced Auckland-based chartered accountants and business advisors who can help. We’ll give you the power to see what’s really happening in your business, so you can take control and start making progress. Click here to learn more about how we can help you achieve your goals.

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