In this day and age, finance is still a dirty word to many entrepreneurs and employees, with many still not willing to take an active role in the day to day finances of their business. Many even hate doing their own expenses even though they benefit financially from getting these done in a timely fashion. How many times have you heard “I’m not a financial person” or “The finance department does that”?
So why do so many people fear “finance” as a whole and how can getting over the fear of finance benefit you and your organisation.
Firstly, it’s important to define exactly what finance is. Finance is a language, a way of communicating with others such as French, Spanish or German. It is important for anyone who comes into contact with a Finance “speaker” to be able to understand what they are saying and be able to respond clearly and precisely whilst still getting their point across. This is not to say that you or your employees need to be able to speak fluent “Finance”, merely that you need to understand the basics. I’m sure that when you go abroad to a country where you do not speak the language, that you know a few words and the rest is done by gesticulating. The same can be done with Finance. Learn the basic key words/ concepts in order to get your point across.
So if Finance is merely a way of communicating with others, why do so many people fear it and defer financial responsibility to others?
There are a number of reasons people fear Finance and we have summarised the key ones below:
Fear of looking stupid
Some people are afraid that they will look stupid whilst trying to discuss Finance with only basic knowledge. Whilst you may not be able to get your point across as clearly or precisely as you would like at the beginning, by getting involved in these types of conversations on a regular basis this will become easier and easier. Furthermore, being able to put across your point of view in a way which is clearly understood by others is a hugely powerful tool and can have a significant impact on your career/ business. Just like learning French or Spanish, Finance and financial conversations need to be practised. Don’t worry about not getting it right first time, people will respect you so much more when you can ask for what you need clearly and concisely in their language.
Fear of making a mistake
Many people fear making a mistake when they first take on finance or a financial role within a business. They believe that there is no way of undoing what they have done and that this “mistake” may be critical to the business. In reality, there are very few mistakes that cannot be undone or that would have a critical impact on a business. As Winston Churchill once said “All men make mistakes, but only wise men learn from their mistakes”. Moreover, the fact that you are getting involved in the finance of the business is more likely to have a beneficial impact on the business, especially if you are closer to the operational side of the business than the finance department. More often than not, the finance team is removed from the day to day operations and this presents an excellent opportunity for you to help them understand what is really going on.
Not understanding it
As with any new skill, there will be a number of things that you may not understand straight away. The key with this is to ask for help where it is needed and to really listen to the answers you are given. Make sure that you have fully understood the answer and then apply your new knowledge straight away. The more often you do this, the quicker you will become a pro. If for whatever reason, you a struggling then read a book on the subject or get help from a professional who is trained to help explain financial concepts in a number of different ways. There are many Finance for non Financial Managers books and courses out there designed to help you on your way to becoming a Finance pro!
Overall, be open to learning a new skill or “language”, understand what you can gain from it in terms of being able to put your point across in a way that is easily understood. Then go out and practice, practice, practice.
Wishing you every success.
About the Author: Nathalie Simpson is the Managing Director of Simply Profitable, a business consultancy established to help make finance simple for SME’s and individuals. Simply Profitable helps SME’s and individuals improve their financial position and understand simple finance through its seminars and one on one financial training and consultancy. Sign up to a number of free financial webinars at www.simplyprofitable.co.uk