How Your Financial Personality Can Make or Break Your Business
As leader of a small business, your personality and natural inclinations will influence the whole tone of your company operations. This is true of every area, but particularly when it comes to your business finances.
You may be funding expansions out of your savings, or perhaps applying for business loans or finding investors. But these scenarios can play out very differently. You could be sitting on the fruits of prudent investments, or maybe you’re in need of fast cash now? Figuring out what personality type and inclinations you have when it comes to money could be the key to making your financial operations work.
Some entrepreneurs are predisposed to behavior types that are harder to moderate – these ‘risk-takers’ are usually great visionaries with the courage and passion for making a business idea happen. Then you have more ‘risk averse’ types who will only proceed with caution but often get further than their counterparts. Business success can happen for both types though, with a few adaptations.
Risk takers tend to be found a lot setting up their own companies, as they can be the type of people who don’t follow arbitrary rules set by others very well, or get easily frustrated with the lack of vision and forward thinking found in some more substantial corporate structures. There are a lot of great qualities for an entrepreneur in this group. But they can also find it harder to stop something once they’ve started, or limiting themselves. Then you have the more risk-averse, who are generally quite good at moderating their impulses and have to work harder to overcome natural caution when making the leap with a decision.
Knowing Which Type Of Entrepreneur You Are Can Help Your Cash flow
If you fall into the ‘all or nothing’ category, it’s going to be more of a challenge to limit or stop financial practices that may hurt your business credit rating. Impactful changes come from understanding where these behaviours come from and working around them. It’s not about having a right or wrong approach – it’s simply about understanding your personal psychology, and the impact that has on your business. You can then create a plan of action that works for your own predilections and finance control.
How To Master Your Financial Behaviour
Being one of the high-risk, all or nothing personality type, tailor your financial resolutions to include things like using only cash for small purchases, to resist snowballing money onto a credit card. Avoid ‘trigger locations’ that tend to make you want to spend, or only go when you have a specific purpose for being there. Make sure you have a cast-iron budget and watertight business finances that are kept completely separate from your personal accounts, so you don’t run the risk of leaking your spending into the business.
If moderation is difficult, learn to get good at saying a flat no to things you don’t want or need or unhealthy behaviors. If you are the risk-averse type, work with that. Don’t try an all or nothing approach, but give yourself flexibility while staying mindful of your overall spending. You may want to try these financial advisor coaching programs so you can handle your business finances well.
Create targeted savings accounts, to save up cash for specific financial goals. You may have more trouble committing to one, overall long-term goal, so make sure that you have lots of little ones to reach incrementally. This will help develop your business and personal financial status and eventually your estate planning strategy.
Remember, estate planning will involve knowledge you might not be privy to, so call a estate planning attorney and have them help you iron out these details. Handling probate can also be a difficult and challenging time. An estate planning attorney can often help people understand the probate process when the time comes and they have to deal with probate themselves.