One of the most stressful things entrepreneurs deal with is having enough money. Making sure it comes in. Managing how much goes out.
The rise and fall of any business ultimately comes down to money.
- Do you have it?
- Are you making it?
- Is there enough to cover expenses?
- Are you able to pay yourself?
All of these are questions that many so-called entrepreneurs refuse to acknowledge or answer. It’s better or might I say easier to keep putting things together or out there than sit down and take a look at the numbers.
As someone who runs an association it’s something I look at once a week minimum. I check the bank balance weekly too. It helps to gauge if we’re bringing in enough revenue or if expenses are getting out of hand. And when the numbers don’t add up, I have to make the tough call.
It’s not met with understanding or even “well maybe we should help out.” It’s usually met with indifference as if I’m a mother taking a toy away from a child. This is how employees feel when layoffs occur or budget cuts for teachers happen.
In most cases, it is the ones controlling the money who have let things get out of hand.
But what happens when you keep people informed but they refuse to follow the budget?
That’s when as a leader you’re forced to make the tough decisions and of course, get the blame for things not going in the right direction. It is frustrating to say the least. But as someone who has had to manage budgets even before I became an entrepreneur, I can tell you first-hand it’s not the most fun part of the job. It’s the part where you have to have thick skin and look more to the future than the present. You also have to be absolutely present at the same time.
What do I mean?
You have to be keenly aware of everything that’s going on whether people keep you informed or not plus look to ensure that money continues to come in 6 months from now, 1 year from now and so on. It’s a delicate balancing act but someone has to do it. Usually the person in charge of the finances is not people’s favorite person either.
You’re tasked with keeping people on track and not allowing them to just have and do as they please.
- Whims will bankrupt a company.
- Pleasing others will cut off cashflow.
- Not wanting to remove people from roles they are not qualified for or severely lacking in will stop any revenue from coming in that pipeline.
Yet, as the money manager you have to tell people these things. You have to let people know that changes or role changes have to be made. Again, having thick skin is important. To the people who are not managing the money all they care about is what they want when they want it. Everything is fun for them. They have no vested interest or responsibility in these matters. They have no regard for the viability, sustainability or financial health of the entity. This is why leaders sometimes have to separate themselves from the people they lead. You can’t be friends with them in these instances. You have to be logical and forward thinking.
I’ve struggled with this issue as it’s hard being the one to always say ‘no’ because people aren’t always doing what they could and then want to spend how they want. I’ve struggled with being called names, talked about or even ostracized because I make sure money comes in, cut off expenses that are eating up the budget or even putting a hold on people’s fun projects.
Too many people walk around acting or appearing as an entrepreneur. But if you asked them about their financials, I bet they couldn’t tell you a thing.
You. Hear. Me.
Not. A. Thing.
Money is the oxygen of a business. And many people are walking around carrying an oxygen tank because they refuse to step up, look at the numbers and run their business like a business.
I have had to close businesses due to lack of oxygen. I have sold a business due to me putting it on the oxygen tank because I no longer wanted to breathe life into it anymore. So I am sharing from personal experience on both sides of the same coin. I know what it means to not pay attention to the money. To think things will get better without actually sitting down and creating a plan of action specifically for the money, long-term.
The reality of business is money is the oxygen of your business. If you want to breathe easy then you will make the concerted effort to actually learn the numbers of both your business model and industry itself. Because smiles, hopes and wishes won’t stop your business or project from shutting down due to lack of funds. I know from experience.