Entrepreneurs are often full of tenacity, determination and a healthy dose of optimism. It’s typically what sets them on the road to starting a business in the first place. But if left untempered, the same enthusiasm that gets them started can lead to overconfidence and unnecessary risk taking. That’s why entrepreneurs need accountants.
Balancing economic caution with entrepreneurial spirit
Keeping clients on the right side of the knife edge between optimism and overconfidence is a challenge for many accountants. According to Xero’s 2017 Make or Break report, 77% of accountants believe their clients take risks that may impact the long term health of the business.
While the go-getting, glass-half-full approach is a wonderful thing, a little fiscal caution goes a long way. Without guidance, new entrepreneurs can waste their excitement and energy in the wrong places. More than three quarters of business owners embrace mistakes as learning opportunities. But some mistakes are more costly than others.
A trusted financial advisor can add some perspective to these situations. Because they’re emotionally detached from the business, they can moderate the break-neck pace their clients tend to move at.
It pays to seek the advice of a professional
Accountants have a far greater understanding of the economic climate than most. So it’s worth listening to their advice.
- Most people who run their own business don’t have an official mentor. But half of those business owners who have an accountant consider them a trusted advisor. Another 31% of business owners who had been in business for two years or less have called on an external advisor in the last year.
- According to our research, small business owners don’t expect Brexit or the Trump administration to impact them much. But their accountants think otherwise, and encourage their clients to be financially conservative. This provides a welcome safety net for any tax changes introduced by Trump or Brexit.
- 94% of business owners say cloud software is beneficial, but only 19% of them actually use it. On the other hand, accountants are adopting cloud software at a much higher rate – 55%. Perhaps the accountants are onto something!
Working alongside an accountant or financial advisor can reduce stress and increase productivity. Like an athlete needs a coach and a writer needs an editor, entrepreneurs need accountants. With a professional’s level headed counsel, small businesses can not only to survive, but thrive.
Read our Make or Break 2017 report to explore our findings in detail. Download report here.
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Source: Xero
