Do you have a growth mindset?03rd July 2018
Karen couldn’t see a way out.
Her bookkeeper decided to take early retirement six months ago, so Karen set to finding a replacement.
But since then, she’d bought the bookkeeper back twice because the replacements hadn’t worked out.
As the owner of the company, she felt responsible for not only recruitment, but for pretty much everything else involved in managing the company’s finances – from locating some of the data needed in accounts, to chasing unpaid invoices and balancing the books.
Despite having a small team, Karen was working 17 hour days to keep on top of things.
With a growing company in her hands, she felt like everything was falling apart.
Over the last few weeks, we’ve talked about how important it is to change the way you manage your finances, when your business is over-reliant on one person, like Karen’s…. When you grow fast, and the old way of working let you down…. And when you simply want to set up your financial management right, from the start.
But why can some business owners make the shift, bringing in a finance director and instituting robust financial controls and processes….
….Whilst others – like Karen -- struggle on, relying on shoddy financial information, without a clear view of how much money is coming in and out of their business, and trying to handle too much of the finances themselves?
Here’s my answer: It all comes down to mindset.
As a business owner, you either have a starter mindset, or a growth mindset.
The starter mindset keeps you playing small. You are focused on the here and now – what needs to be done today? What can you afford at this moment?
You try to do too much yourself, because your resources are limited. And you won’t invest in new people, equipment or tools until you are absolutely sure there’s no financial risk.
The growth mindset helps you think bigger. You work out what your business will need to have in place tomorrow in order to thrive – and then make sure those happen.
This means bringing in the best people for the job, even when it’s a financial stretch. Putting in place robust systems and process that will allow you to scale fast. And making sure that the business does not rely on your time and your insight to function, because that would limit it.
One mindset stunts business growth and the other supports it.
With a starter mindset, Karen feels responsible for everything. And by doing everything, she feels like she’s in control. But that’s an illusion.
Even though the ultimate responsibility for the company does lie on her shoulders, this doesn’t mean all the tasks have to be done by her too!
Take her financial management. How differently would her business perform if she implemented some financial processes that any bookkeeper could pick up – so things didn’t totally fall apart every time her bookkeeper left?
Or instead of employing different people to manage her accounting, she outsourced the entire finance function – taking away the pain of hiring, losing (or firing!) people because the outsourced team would support her company consistently?
Or if she invested in a finance director who could give her monthly financial reports, insight into her financial situation and good financial advice – so she could make better decisions and ultimately grow much faster? (She’d finally be able to hire the staff she needed to cut down her hours, for one – and stay sane….)
Yes, all of those options might feel risky if money is tight.
And if you have a starter mindset, well, they’re non-starters……
But then nothing will ever change. The company’s growth will always be limited.
Taking any of those steps to professionalise your financial management requires a growth mindset – a willingness to take a small risk, in order to enable massive rewards.
Do you have a growth mindset?
Hit ‘reply’ and let’s talk about how we can help you professionalise your financial management – putting in place all the systems and processes you need to grow to £5 million, £10 million and beyond.