Why So Many Business Owners Are Driving Blind – And How to Fix It

Tom Griffiths (United Kingdom)

Running a business is a lot like driving down the motorway. There’s a destination in mind – growth, stability, freedom – but for many business owners, the windscreen is foggy, the dashboard doesn’t work, and there’s no sat-nav telling them what’s ahead. They’re moving fast, but they can’t really see where they’re going. Meanwhile, competition is strong, people problems keep arising, and profit margins are always thin.

The Hidden Blind Spot

Even in companies turning over millions, the same patterns present themselves. Owners work long hours, battle to find good staff, and wonder why the bank balance never matches the sales figures. The accountant says the business made a profit, yet there’s barely any cash left in the account. This happens because most finance teams are built to look backwards. The bookkeeper records what has already happened. The accountant reports what has already happened. The owner reacts to it afterwards (when it is out of date and too late). Nobody is looking ahead. And that blind spot quietly costs businesses millions every year.

This results in smart business owners:

  • Making gut-based decisions based on how much money is in the bank account because the reports the accountant sent them look like gibberish.
  • Avoiding the numbers completely because they only get more confused.
  • Thinking everything’s fine because there’s money in the bank – until they realise they have a big bill coming up that will but them into the negative.

What’s missing is a forward-looking guidance – a way to see what’s really happening now and what’s coming next – essentially, the job of a CFO. At around £5m to £15m turnover, not having this support in place can become a serious problem because the cost of making mistakes gets higher. However, the business is usually too small to afford a full-time CFO.

Why So Many Businesses Fail

The numbers are sobering. Half of all businesses fail within five years. 96% fail within ten. Of those, 82% fail because of cash flow. They don’t fail because of bad ideas or lack of effort. They fail because they run out of money. Profit doesn’t keep a business alive. Cash does. A business can show a profit on paper (on the P&L produced by the accountant) but if it can’t pay the bills, it’s game over. For this reason, every business needs a simple 13-week cash flow forecast – nothing fancy, just a clear view of what’s coming in and what’s going out. It doesn’t need to be complicated. But it does need to exist.

From Owning a Job to Owning a Machine

Here’s the mindset shift that changes everything. Stop thinking of the business as a job to own. Start treating it like a machine to build. Think about a washing machine. Its purpose is to wash clothes. If it stops working, there’s a reason. Find it, fix it, and it works again. A business is the same. Its purpose is to make money. If it isn’t doing that, there’s a reason.

Source: iCN Issue 51  (The Power of Group & Team Coaching); page 43

About Tom Griffiths

Tom Griffiths is the Founder of Synergy CFO Solutions, helping £5–£15m business owners simplify their finances, make data-driven decisions and improve profits through a forward-looking financial strategy.

You can find Tom on LinkedIn (Tom Griffiths CFO) or email him at tom@synergycfosolutions.co.