Luck or Financial Leadership for Your Business - Erin Armstrong

Luck or Financial Leadership for Your Business

by | Mar 30, 2023 | Leading Your Business, Money Mindset, Small Business

If you’ve looked at any of the research on business success, you’ve probably seen this disturbing statistic: for new US businesses, only about two thirds will still be open after 2 years. And only about half of these businesses will still be around after 5 years.

If you were to talk to the owners of these failed businesses, here are some of the explanations they might give for why they weren’t successful:   

  • They didn’t have enough capital in reserve to weather a rough period.
  • Their business never became profitable.
  • The market changed and their product or service was no longer needed.
  • They never figured out an effective way to position their product or service.
  • Their marketing strategy worked for a while, but then it stopped working.

These explanations all share a common theme—bad luck. Either someone had bad luck from the get-go, or maybe they were initially lucky, and then at some point their luck changed.

As I’m sure you know, luck can have a significant impact on your business. There are a million different variables outside your control that could work in your favor, or work against you. And for some fortunate business owners, it seems like they only succeeded because they were in the right place, at the right time, offering the right product or service.   

But this kind of success doesn’t last—sooner or later, luck always changes.

Truly successful business owners can appreciate good luck, but they don’t depend on it. Instead, they do the work to make sure that their business can survive even when luck turns against them for a while. I refer to this kind of work as Financial Leadership.

Financial Leadership means looking at (and taking the time to understand) your financial reports. It means assessing the profit margins on the different services and products you offer. It means regularly thinking about the positioning and pricing of your current services and products. It means evaluating the return on investment you get from each of your employees. And it means implementing a tax strategy for your business. In short, Financial Leadership means taking full ownership of the financial side of your business.

Now, you might be thinking one of two common things…

Possibly… “Ugh, this is too much! How can I add this to my plate?! There’s so much I’d have to learn.”

Let me state this clearly: taking full ownership of your business finances does NOT mean you don’t have help. In fact, you’ll do best if you have financial help (whether that’s in the form of a bookkeeper, a CFO, a tax strategist, etc.)! The difference is that you are engaging and aware of the financial components–and that it is you who is actually making the final decisions for you and your business as you’re the only one who can.

Or, perhaps… “Financial leadership doesn’t sound very sexy.”

However, financial leadership is sexy. Here’s why. Embracing financial leadership is a powerful statement that you are in control of your business success. Once you take this step, you won’t feel like you’re at the mercy of all those external variables we talked about (in other words, luck). As the financial leader of your business, you can make the decisions and build the infrastructure that will help your business thrive regardless of the environment. And now, instead of worrying about the future, you’ll enjoy the work you’re doing right now, and you’ll be confident about the life you’re building for yourself and your family.

Over to You…

Are you ready to financially lead your business? 🙌 Awesome, you’ve got this! If you’re interested in getting a CFO’s support and perspective as you move away from a reliance on luck, I’d love to talk to you about the different ways I can help you fully step into this role!

Wishing you fulfillment & financial success,

Erin Armstrong

Erin Armstrong is a Business Advisor, Chief Financial Officer, Tax Strategist and licensed Enrolled Agent who’s on a mission to financially empower business owners. Her unique, comprehensive approach integrates all the financial aspects of your business (such as accounting practices, tax strategy, profitability, budgeting, & cash flow) with an emphasis on developing a positive money mindset so you can move forward in a confident, proactive and empowered way. Find out more about Erin here.

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