Money…as I speak with prospective coaching clients, it’s a subject that can’t be avoided, and typically, there’s an issue involved. In my last entry, I discussed AVOIDANCE. Now, let me discuss ABDICATION. A sign of that is when I hear a statement like, “Money? I don’t handle the financials. That’s what my accountant is for.”
This behavior of abdicating your finances to an expert goes hand in hand with avoidance. And this person can be a member of your team or an outsider; anyone who knows how to manage money somewhat better than you do. I’ll always ask, “Are you abdicating or delegating your finances?” In other words: “Do you defer to your accountant, then wait for them to give you financial results that’ll help you better lead and manage your business? Or do you already know the results they’ll give because you know how to read the financials yourself?”
Many business owners abdicate—and while this is more proactive than avoiding the money issue all together, it still puts them in a risky position. Until you really understand the numbers in your key financial statements, you’re not in control. You don’t know how you got to where you are, and you can’t spot anomalies or make intentional business decisions to take your company where you want it to go.
We urge every client to take charge of their finances: to understand (at a bare minimum) what they’re looking at on their Balance Sheet, and to know their Key Financial Indicators and cash position.
When we talk, I can add some more clarity to this subject and even offer you a guide that’ll help you strengthen your finance systems. Trust me – it’ll pay!
PS: Thanks to Kirstin Fulton, a Content Creator for EMyth, for adding clarity to the key issues businesspeople have with their financials.