Have you ever said this to yourself? If so, it’s probably more a limiting belief rather than an accurate evaluation of your abilities. You may believe it because it is a convenient reason to justify avoiding facing the topics of money and finance, which many people consider foreign and overwhelming. Basic money concepts and even learning how to balance a checkbook are topics that are not usually taught in schools, not even at many colleges. Chances are that unless your parents were financially literate and were proactive in teaching you, you did not grow up understanding money.
Money is a sensitive topic because of the emotional attachments we have to it. Most people need or want to have more than they do and feel badly if they find out that they have less than their peers, or that they have not made wise spending or investment choices. Discussions regarding money can lead to embarrassment over not measuring up or having made mistakes. Being short on money can be seen as a deficiency and can cause fears of being judged. On the other hand, having a perceived surplus of wealth can raise the concern of being offensive by seeming to appear arrogant or better off than others. It could also make you the target of envy or cause greedy people, who are more interested in what you have rather than who you are, to be attracted to you.
We need straightforward and clear dialogue regarding money. Face your financial fears to deflate them. Education is empowering!
Are You a Business Owner?
Do you have your hands full managing the day-to-day operations of your company and are not sure how to keep financial records? Are you knowledgeable of your industry and product but don’t understand the how to interpret the numbers side of running a business? Are you confused because your company is running out of money although sales are increasing?
90% of all start-ups fail in the first 4 years. One of the main reasons is the lack of funding, which is often a symptom of mismanagement such as non-strategic or wasteful spending, and an inability to raise capital. The owners can’t afford to be afraid to look at the cold, hard figures, nor can they afford to think that accounting for company funds is ‘boring’, or ‘not my job’.
Bookkeeping and understanding accounting is essential for your business. If there are no financial records, then the transaction didn’t happen and even an accountant won’t be able to help you without documentation. Financial records need to be organized to produce financial statements, which are used to review a company’s performance. Financial statements are analyzed to understand where operations are robust and profitable, and to investigate and improve areas that are under performing. A business owner needs to know cash sources and uses, a project’s break-even point, and how to maximize profits not only for internal management purposes but also to be able to clearly communicate that to outside investors and lenders. You can’t expect to raise capital if you can’t explain how your company is doing.