As a small business coach, I see people lose money all the time. (Of course – I see plenty of people make plenty of money too!) As a business owner, I’ve lost money myself and there’s nothing enjoyable about the experience. There are many reasons why businesses lose money but one of the main reasons is that we believe money can replace sound management practices.

While money gives a business choice and provides some room for error, it cannot replace good management. As an example, a business owner with money may be interested in hiring for a particular position. Rather than go to the trouble of providing exhaustive training and closely manage the role, the owner decides to pay more and hire a candidate who appears to have higher grade skills and experience. Unfortunately this rarely works and the owner often ends up paying more money for the same poor result.

Having finance to fuel the growth of a business is important because making mistakes and failed experiments are inevitable. However, part of being a successful manager is your ability to know when money is the answer and where management and hard work should take over. It’s interesting – as much as this message is written about, most of us won’t pay any attention to it. It seems most of us need to make the mistake and learn it for ourselves.

If you’d like to speak to a business coach to get some sound business advice on when to spend and when to manage, get in touch with us. If your business is not showing any signs of growth then you will benefit from a relationship with a business coach. Remember, a major factor in business success is based on your ability as a business owner to make connections and get information. If it’s business advice you need – get in touch with a business mentor today.