Three types of financial management in business owners
One of the most telling features of how any individual small business owner approaches their role can be found in how you approach your finances. Have a look at our three key types of small business financial management and see if you recognise yourself in any of them. Are these helpful or unhelpful to you and your firm? Could you change them, or get others to assist you in doing so?
The Fantasist – Whilst the fantasist is often a big-thinking and creative individual, this doesn’t always translate into inspired account management. Their financial decisions are often instinctual and intuitive rather than based on close scrutiny of the numbers. Whilst this frees their mind to come up with the next imaginative idea for their business, focusing a little more on their finances could help make their ideas more likely to happen. The fantasist benefits from having an enterprising financial director or accountant to balance out their business dreams with some data-driven reality.
The Gambler – Taking an opportunistic approach to business, the gambler thrives on spontaneity. A born entrepreneur, the gambler’s instinct to leap on what they see as a golden opportunity can lead their business down two quite different paths. It can result in capitalising on circumstances at the right time and getting a few steps ahead of their rivals. But it can also lead to impulsive decisions that don’t pay off, leaving their coffers low and their business vulnerable. The gambler needs someone who can manage their financial data both accurately and quickly, ensuring any figures they need are available straight away to allow them to make fast and informed decisions whenever necessary.
The Disorganiser – Seeing their finances as something to both despise and ignore, the disorganiser’s office is most likely crammed with unfiled paperwork in every available nook and cranny. It’s only when they are asked for something relating to their finances that the disorganiser actually does anything, by which point they’re frantically looking for the one receipt they can’t find whilst panicking over every other invoice and bill they see as they search. But just because the disorganiser isn’t great at managing their finances doesn’t mean they’re not a good business owner. They simply need to find an accountant they trust to take care of their finances and allow them to keep the numbers looking healthy and organised.