Summary: Are your limiting beliefs keeping you from achieving financial and business success? SME Expert Anirudh Gupta shares 6 beliefs, that in his experience as a financial advisor, prevent SMEs (Small & Medium Enterprises) from realising their business potential. Kick-start the week with this thought-provoking article that compels you to re-examine your financial beliefs as a business owner. Do share your insights and takeaways in the comments section below.
Life as an entrepreneur is exciting and invigorating. Having a solid grip on your finances gives you the freedom to make bold decisions and enjoy the journey.
Financial success is greatly determined by your mindset towards business and money. Listed below are certain limiting beliefs that prevent entrepreneurs from achieving lasting financial success.
Belief 1: The lowest cost solution is the best solution
This is not always the case. While selecting a solution, you must ensure that you do not get shortchanged in terms of support, quality or critical advice when you require it the most. The best recourse should be to select an optimal solution from both a cost and long-term efficacy point of view.
When we got our business website designed, we spent a reasonable amount and selected a partner that really understood our value proposition and core competency. This initial investment has ensured that we have a strong and effective digital presence.
Belief 2: Underinvestment in business
Many SMES do not understand the importance of investing in their own business and several businesses are not adequately capitalized. This is because sometimes SMEs do not commit enough to achieve their dreams at a business level because of faulty thinking patterns. Often people do not invest in fostering a training culture and consequently have people who are not adequately skilled to deliver the relevant client experience.
When a leading consumer goods company was facing challenging times, they were advised to look at the business as an asset. This advice really benefited the organisation leading to further innovation, strategic acquisitions and growth.
Think of your business like an asset and strive to create wealth through this asset.
Belief 3: Maintaining records is not the best use of my time
As an entrepreneur you like to drive business growth. However, if you don’t maintain records you will not know how much is to be collected from clients, how much is owed to suppliers, or how to ensure optimal results on taxation.
You can hire someone to maintain records on a retainer basis, if not full-time. This lays the foundation for the organisation from a next level of growth point of view.
Belief 4: Fear of the downside
Fears are natural in the course of business. This is also the fundamental requisite to be prepared for any eventuality. However focusing on a base case scenario (based on a projection of future events that assumes only the best possible circumstances) helps to avoid wrong resource allocation decisions.
You should look at a milestones-based approach to create growth. This approach works well for growing businesses
Belief 5: Tax saving is critical
It is important to plan your taxes. However, what is recommended is to assess maximum value of the options in question. Sometimes in the hurry to plan taxes, people lose perspective of the other stakeholders they need to address, like banks. Low profitability may help to save some taxes, however your banker may think your company is a risky proposition. It is important to maintain balance between the two.
An associate of ours showed less income on his tax returns. This didn’t help him to raise the loan needed for growing his business. Fortunately, he corrected his approach in a timely manner and this has helped him build his business.
Belief 6: Dreaming big has a lot of risks
This is one of the biggest limiting beliefs and is not always true. If you dream small you are unable to inspire, motivate and retain talented people. A dream acts as glue for the team and expands the scope of what you can achieve. A big dream becomes the driving force to challenge your limitations.
We are what we think. If you can amend your limiting beliefs, the world is your oyster.