#Collaborative post
How many financial decisions do you make in your small business? You might assume that the typical financial decision involves figuring out how to manage large company funds. However, entrepreneurs are faced with money decisions in most everyday activities, even when they don’t realise it.
Imagine the typical day at work, whether you work from home or in an office. It is a cold day, yet the heating is off. Will you turn it on and increase workplace comfort? It might seem like a simple yes or no question, but it will affect your costs in the long term.
Should you outsource a time-demanding task, or should you keep it in-house? Outsourcing may save time, but it could also be counterproductive if the result doesn’t match your expectations.
You are struggling to finance growth. Is a commercial loan a good idea, or should you simply wait and save more?
Financial decisions are a major part of your day, even if you are not aware of them. So why does organisation matter when it comes to financial strategies?
Your environment affects your decision-making abilities
Think about how your mood differs depending on your surroundings. Your office needs to be an organised and productive space to maximise your abilities to make informed and unbiased decisions. Therefore, things such as lighting and storage can play a crucial role in the financial strategy of your business.
Why? Because being surrounded by clutter in a dark room will affect your mood. The decision could then be influenced by how you feel. Once you let emotions drive business decisions, you are at risk of picking the wrong strategy for emotional comfort or out of anger.
You can’t hide the lack of knowledge of what is happening in your business/market
You should make a point of collecting data and information before making a decision. Unfortunately, lack of transparent communication or failure to analyse business data correctly could lead to mishaps. These things happen, and while you could recover rapidly, the market may have already noticed your mistakes. Investors, for instance, consider credit market insights to identify reliable companies. They are likely to spot anomalies within the company’s direction, which could affect your chances of gaining funding access. Therefore, it is crucial to organise business information and reporting at a company level. The last thing you need is to take a wrong step because the information path is messy or disrupted.
Long-working hours mean lack of attention
According to a study from Stanford University, people who work more than 50 hours a week are likely to experience a drop in productivity. Indeed, while working hard is the key to success, working for too long will decrease your mental focus. As a result, you are not able to digest new information, and therefore, you can’t make good decisions.
Consequently, businesses must stay on top of time and task organisation to reduce the risk of overtime work. Going the extra mile to save costs could, in fact, be the cause of poor financial decisions.
How organised are you in your business venture? From an organised office to structured communication and information paths, organisation is a crucial factor in the decision-making process.