One of the many characteristics that separate the small business manager from the large publicly traded corporation is the objectives. Yes, both types of businesses want to create financial gains, and generally speaking, the greater the financial gain the better, but that is generally where the similarities stop. Many, if not most small businesses have other objectives besides MSW (Maximize Shareholder Wealth).
Small business managers create their business with additional objectives in mind such as freedom, flexibility, pride in one’s work, passion for a hobby, or a plethora of other objectives. These “add-on” objectives are what make small businesses special. They give colour and personality to small businesses, and life would be significantly poorer without them.
During the COVID crisis, the focus quite naturally for many small businesses has been on survival. It has been on generating enough cash flow simply to last. As authors of a book on finance for small businesses, we fully understand and appreciate having clear financial goals and objectives. We also advocate that small business managers understand and have an appropriate focus on the financial objectives and particularly cash flow and financial flexibility. After all, these are the variables that allow a small business to exist, and to thrive. However, it is equally, if not more important to focus on the other objectives – the objectives that created the inspiration to start and then maintain the business in the first place.
It is easy to have misplaced focus during a crisis such as COVID. In fact, it may be necessary to zero-in on just a few key and urgent variables when survival is in question. However, as we hopefully start to slowly pull out of the pandemic, small business owners should start to refocus on their larger objectives. Yes, finances and cash flow are important. However, so is happiness.
Rick and Dan are the authors of Small Business Finance and Valuation, published by Business Expert Press. You can also find it on Chapters/Indigo as well as on Amazon