Let’s talk about the money …..
Small business can be one person, a person and their marital partner, or 2-3 business partners. No matter how many people running your business, you need to talk about the money.
Financial stress is a significant contributor to the failure of relationships, both personal and business. Unless you can openly talk about the financial health of your business, money will hang over the relationship like a cloud.
Let’s consider a small sole trader. They may use an Excel spreadsheet, or they may just scan the bank statement they receive in the mail. Their accountant may do their GST for them. Around 6 months after balance date they will meet with their accountant to discuss the annual financial statements, discussing transactions that are between 9 and 18 months old.
Not only do they not know their financial situation, but there is no discussion on how that last month went, and whether they are going to achieve their financial targets for the year. If cashflow is tight, and they are unable to pay the bills, they will not always understand why. This can create a lot of stress.
Now lets consider a small sole trader who uses cloud accounting software such as Xero or MYOB, and either uses a bookkeeper to help do some of the paperwork and answer questions or has an advisor who provides monthly reports and updates and is available for a chat. If cashflow is tight, this sole trader will know exactly why, and what part of the business they need to adjust in order to grow.
This becomes even more important if you have 1 or more business partners.
Talking about the money with someone shares the burden and reduces the stress. Know where you business is at, and get rid of the money elephant in the room.