We’ve all done something (or several somethings) in life we regret. Or we haven’t leaped on an opportunity fast enough, and, as a result, ended up regretting our inaction. In the world of finance, this is especially true, at least according to a new study released this summer by the National Foundation of Credit Counseling (NFCC). What do Americans regret the most? Fifty-three percent said they had regrets about habitual overspending.
Other common regrets included:
– Inadequately saving (18 percent)
– Insufficiently preparing for retirement (14 percent)
– Not having bought a house (10 percent)
– Buying a house (5 percent)
For businesses, financial regrets might take different forms, although overspending may also be near the top of the list. Whether you’re paying more than you have to for raw materials or inventory, not negotiating salaries well so that payroll is higher than it needs to be for the talent you’re hiring, or even just paying too much for your lease and other operating expenses, habitual overspending hurts your bottom line month after month.
Is Your Small Business Overspending?
A part-time CFO or outsourced financial controller can help you discover the places where overspending is hurting your business, and other areas (perhaps sales and marketing) where you need to invest more. Companies often don’t invest enough in advertising or sales during lean financial times, but that’s exactly the time you need to be setting your business apart from the pack with strong sales and marketing campaigns.
Avoiding Other Financial Regrets
Maybe your financial regrets are more complex – not applying for investment capital to take advantage of an opportunity in the marketplace, or even spending too much to launch the wrong product or service at the wrong time.
All of these mistakes – and more – can be avoided through careful financial analysis and financial forecasting. It all starts with accurate, up-to-date bookkeeping, and the presence of a trusted advisor who can help you see the stories behind the numbers.
And don’t worry. Your part-time CFO is not all doom-and-gloom, there to help you see and analyze past mistakes or help your company avoid future ones. He’ll point out what you’ve done right time and again, and show you exactly why it worked from a financial standpoint, so you can continue investing your time and money in the right places.
He’ll also help you avoid future financial regrets by spotting opportunities while there’s still time for you to act. He won’t make the decision for you; that’s still all up to you.
Don’t let your next financial regret be continuing to maintain your own books and floundering on your own with no financial guidance for your business.