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6 Main Causes of Financial Stress for Business Owners

Are you a business owner?  Is there a lot of stress for business owners in your business?

If so, there are likely several factors that make your job very stressful! Stress can make your position as an owner and the upkeep of the business so much more difficult to deal with, which can physically manifest in your business, so you must manage your business-related anxiety in a healthy way.

Depending on the stresses you personally experience, there are different ways to manage this feeling that can be more or less effective than others; all depending on you.

In this article our Australian debt collectors will address 6 large stressors of a business owner and how you can manage this to improve your management!

Stress for Business Owners - Managing Staff

Managing staff is one of the most significant causes of stress among business owners and should be dealt with (like any cause of stress) to prevent negative effects in your company.

Regardless of the type of business you own, keeping a trustworthy and well-managed staff basis is likely a vital element of operating on a daily basis.

If your staff is not either of these things, it can incite serious stress in you as the owner of the business. After all, how can you run a business without others working for you?

One way to ensure you have a good team of employees working around you is to offer training and other similar opportunities within the company.

Nothing is worse than staff who don’t know what they’re doing, so take the time out of your life to make sure they do!

Furthermore, make sure you are treating your employees well as no one likes working for a boss that doesn’t treat them right and may slack off on the job or quit entirely.

Stress for Business Owners - General Administration

Another main cause of stress for business owners is general administration.

The administration is practically the keeping and management of files and records in your business to make sure everything is up-to-date, easy to access, and smooth running.

This can be quite dry and seemingly unimportant work, but businesses can rise and fall depending on their abilities to properly manage administration.

Some parts of administration, such as records of earnings and such, are required by law also, so it is important you are keeping it together in this field!

You can go about this by taking a small amount of time, such as 10-20 minutes, out of every day to complete a simple or quick task.

This may be checking for customer payments or business expenses; just something simple!

However you choose to manage it, make sure you are taking the time to keep on top of administrative tasks, so they don’t pile up and stress you out.

Keeping the Company Successful and Profitable

Another significant cause of stress for business owners is feeling entirely responsible for the success of the company.

This is especially prevalent in small business owners, as they likely do not have the same level of funding behind them as big corporations do.

Not having as much money behind your business as you would like can make any decision, especially ones related to finance, feel like the be all or end all of your company.

A way to manage this is to celebrate small victories and to simply put things into perspective in this area. If a decision in your business did not go just the way you planned, try not to panic too much!

There are many factors outside of your control that can contribute to the success of your business and, furthermore, chances are a basic financial decision will not sink your relatively healthy business!

Of course, do not make financial choices lightly and make sure you are certain before engaging in any new expense.

Stress for Business Owners - Keeping Clients Coming

Another significant factor that contributes to the stress of a business owner is the process of attracting and maintaining professional relationships with new clients and regulars.

Customers are absolutely vital to your business. They are, after all, the reason that you are bringing in profit at all!

They are usually aware of this, however, which can occasionally mean they can be difficult to keep happy all the time.

A way to make sure your customers know exactly what your business offers and how they will be treated generally is to tell them straight out!

Send a clear message to customers informing them of the product or service your company offers to make sure they are aware of exactly what they will be getting with you!

This way, people that are looking for just that will keep coming back and if they give you a hard time down the road, you can remind them of this conversation.

Make sure you have a target audience, also, so you can find a niche within your market and find more customers that will be happy with this! 

Stress for Business Owners - Paying Taxes

A further cause of stress for business owners is taxes and, more specifically, the process of filing and paying them.

Managing taxes is a very complex process that can take quite a lot of time out of your day as a business owner.  It can also be very confusing and hard to continually manage.

A way you can deal with this is by dropping the physical spreadsheets and investing in some software that can file your taxes for you in a much easier manner.

This can simplify the process and free up some extra time to manage other elements of the business.

Furthermore, if you do not have one already, you may want to look into employing an accountant to handle the entire process for you.

Debts are a Great Cause of Stress

Another element that can cause stress in business owners is both incoming and outgoing debts to your company.

Outgoing debts, or debts that your business owes to creditors, can be managed by establishing a proper budget and managing expenses adequately.

Incoming debts are the debts you are owed by the debtor depending on the clients that you have, this can be another issue and can affect elements such as your business's cash flow and your general finances.

Incoming debts can be difficult to manage if your clients are unwilling to cooperate and pay their debts as agreed.

There are several ways you can manage this, including hiring a debt collector as discussed below.

Managing Financial Stress in Business - 7 Tips & Tricks

Are you stressed about managing financial stress in your business, including finances, debts, or expenses?

This is a very common point of stress in individuals all across the globe and levels of stress can rely heavily on the specifics of your personal monetary situation.

If this is the case for you, there are several strategies you can apply to your life to relieve yourself of some of these anxieties.

This article will outline 6 strategies for managing financial stress and how their application can help you!

Get Rich Schemes Don’t Work

The first task when attempting to manage your financial stress is to realise that get-rich schemes will never and do never solve your money related stress!

Get-rich schemes can seem extremely appealing. With the promise of fast money, who wouldn’t be drawn in?  This includes some fast business loans companies.

Well, a vast majority of get-rich schemes fall apart quite quickly. Even in the case that one of these schemes is successful and you become wealthy, your stresses are not just going to disappear.

In actuality, the more money you have the more financial stress will come with it. This may seem impractical. Why would having more money increase the worries you have surrounding it?

Well, money in general is an extremely stress-inducing subject and more of it can just create more issues than it solves.

Reduce Financial Stress in Business by Making a Budget

Ok, now that we’ve discussed what will not solve your financial stresses, it is time to discuss what will not.

Making a budget or a business plan is a great way to give yourself some peace of mind, as well as see some results, regarding your financial-related business worries.

A budget, as you are likely aware, is a plan on which you split your expenses into categories and assign the maximum amount of your income you can spend over a limited amount of time (generally over a week or a month) to each category.

A budget may feel slightly overwhelming at first and you may feel like this is simply adding to the financial stress.

However, this tool when consistently used can help you to properly process your finances and add to your savings, overall decreasing your worries.

Reduce Financial Stress in Business by Setting Up an Emergency Fund

Another essential step in not only decreasing your worries but becoming the most financially healthy and prepared person you can be is to establish an emergency fund.

An emergency fund is a form of savings in which you save as much money as possible for unforeseen circumstances you may come across in the future.

An emergency fund gives you the peace of mind of knowing that if you are suddenly in a situation where extra funding is necessary, such as illness or unemployment, you will have the money there.

It also stops you from falling behind on debt payments or entering into more debt if a circumstance of such arises, meaning late payments or new debts won’t affect your credit score or future.

You should have a minimum of one-month's worth of business expenses in your emergency fund and should be consistently adding to it when you can. 

Reduce Financial Stress in Business by Seeking Help

When in trouble or stressed regarding your financial situation, it may be the best option for both your monetary and mental health to reach out for help.

There is no shame in seeking assistance, and help can come in more ways than one. If you remain struggling with the concept of budgeting and managing your spending, you may wish to take a money management class, a course focused on assisting you with improving on both of the aforementioned concepts.

You may also benefit from a financial planner, an individual that works to help you to make effective long-term and short-term plans regarding your finances.

If your main point of worry is your debts, a credit counsellor may be able to help you. A credit counsellor will help you to restructure your debts and, if necessary, speak with creditors regarding possible negotiation.

Furthermore, if the stress becomes too much and you can no longer manage it, seeking mental health assistance with the help of a friend, family member, or therapist can be really beneficial and help you to let out and rationalise some of your anxiety.

Be Realistic in your Business Goals

Remaining centred and realistic throughout your financial life is essential and can help you to make sense of some of your stress.

Managing money can be hard and all of the fun but expensive things out there make it so much more of a struggle. How am I supposed to maintain my budget when that new phone just came out?

Unfortunately, financial management is a little give and take to achieve the results you want. Even with a budget in place, a fair share of us spends money outside of our means for something that may not be a 100% necessary reason to spend so much money on.

It is important that you try to ditch this habit at the beginning of your process to get over financial stress.

You must be realistic about your current financial situation in order to see any growth or development across it.

Although the occasional retail therapy session may be just what the doctor ordered, you should ensure you are keeping within budget at least a majority of the time.

Overspending now will just create more stress and money problems in the future!

Use Technology to Reduce Financial Stress in Business

You know what they say, technology is man’s (or woman’s) best friend.

The evolution of technology has made money management a much less tedious process; why not take advantage of it?

Using technological apps and other functions is by far one of the easiest ways to track savings, establish a budget, and to keep yourself on track to improving your finances.

The Australian Government provides a free service to Australians entitled MoneySmart Budget Planner.

This website provides a space to input your income, followed by all of the categories one may spend money on over the course of a week.

This provides a clear spreadsheet of where your money is going and an opportunity to recognise past errors that you can amend in your budget.

Reduce Financial Stress in Business Key Takeaways

When there are several elements of money that you must manage, it is easy to become extremely overwhelmed and stressed.

Stress is a complex emotion and can cause a lot of harm to your mental well-being without solving any of the problems at hand.

This is why it is so important that you are aware of some strategies to help you manage this stress to keep yourself healthy!

Remember, if it all becomes too much it is vital that you reach out for help for your own good!

Use a Debt Collector

Stressing over unpaid debts or failed attempts to contact or locate clients is simply an extra layer of pressure that you likely don’t need to be under!

If this is the case for your business, you may want to consider investing in a debt collector to undergo this difficult process for you!

A debt collector will take on the full responsibility of collecting your debt, engaging in whatever processes are needed to do so.

Furthermore, they will come equipped with tools and experiences that are extremely useful in the debt collection process, things that you will likely not have as a business owner.

Advance Debt Collection operates Australia-wide. If you have debtors in different States or Territories in Australia, then you do not need to go anywhere else. Although our main office is in Queensland, we can operate Australia-wide, and have agents in every State and Territory.

We strictly follow the Australian debt collection guidelines and tailor our debt collection processes to follow debt collection regulations and debt collection laws.

Let us help to reduce your business stress by managing your debt collection and/or accounts receivable, to increase cash flow.

Financial Stress for Business Owners - FAQ

Welcome to our FAQ section! We've collated some of the most common questions and concerns surrounding the stresses of being a business owner and strategies to manage them.

Navigate through these frequently asked questions to find insights that could help ease your business-related anxieties.

What are the financial factors of stress?

The financial factors of stress include:

  1. Income: Not making enough money to cover basic expenses
  2. Debt: Having too much debt that you can't afford to pay back
  3. Unexpected expenses: Having to pay for unexpected costs, such as medical bills or car repairs
  4. Financial insecurity: Not knowing if you will have enough money to meet your needs in the future
  5. Financial obligations: Having to support yourself and/or others financially

What is the biggest financial stress in business?

The biggest financial stress in business is debt.  Debt is often the biggest financial stressor because it can be difficult to get out of and can have a negative impact on your credit score and ability to borrow money in the future.

What are financial difficulties of running a business?

The biggest financial difficulties of running a business include:

  1. Low profit margins: If a business is not making enough profit, it can be difficult to cover expenses and pay back debt.
  2. Competition: Businesses often have to compete with each other for customers, which can make it difficult to stay profitable.
  3. Economic downturns: Economic downturns can lead to a decrease in demand for goods and services, which can hurt businesses of all sizes.
  4. Supplier problems: If a business has problems with its suppliers, such as delays in deliveries or price increases, it can disrupt operations and lead to financial problems.

How does financial stress affect work?

Financial stress affects work by:

  1. Reduced productivity: Financial stress can make it difficult to focus and concentrate on work.
  2. Increased absenteeism: Financial stress can lead to people taking more sick days or calling in late to work.
  3. Poor decision-making: Financial stress can cloud judgment and lead to people making poor decisions at work.
  4. Increased conflict: Financial stress can lead to increased conflict with co-workers and customers.

How do you handle financial business stress?

You can handle financial business stress by:

  1. Create a budget: This will help you track your income and expenses and see where your money is going.
  2. Pay down debt: If you have debt, focus on paying it down as quickly as possible.
  3. Build an emergency fund: This will give you a financial cushion to fall back on if you experience unexpected expenses.
  4. Talk to a financial advisor: If you are struggling to manage your finances, talk to a financial advisor who can help you create a plan.

Why is managing staff considered a significant stress factor for business owners?

Managing staff is crucial because a trustworthy and well-managed staff base is vital for daily operations. If staff are untrained or feel undervalued, it can result in inefficiencies and even resignations, putting more pressure on the business owner.

Why is general administration stressful for business owners?

Administration, which involves keeping and managing files and records, ensures the smooth operation of a business. If not properly managed, essential records could be lost, causing potential legal and operational challenges.

How can I ensure my company remains profitable?

Celebrate small victories and keep decisions in perspective. Understand that external factors can also influence the success of your business, and not every decision will make or break your company. Being prudent with financial choices is crucial.

What are some tips for attracting and maintaining clients?

Clearly communicate what your business offers, ensuring customers have the right expectations. It's also beneficial to identify a target audience, so you can better cater to a niche within your market.

How can I simplify the complex process of managing taxes?

Consider investing in tax software that can streamline the process or hire an accountant to handle the tax-related tasks for you.

How do I deal with debts causing stress in my business?

For outgoing debts, proper budgeting and expense management are key. For incoming debts, you can consider hiring a debt collector, like Advance Debt Collection, to manage the collection process for you.

Do get-rich schemes help in reducing financial stress in businesses?

No, get-rich schemes are often short-lived and unreliable. Even if they work, more money can lead to more financial stress. It's essential to have realistic and sustainable strategies.

How can technology help in reducing financial stress?

Technology offers apps and platforms to track savings, set up budgets, and manage finances. For example, the Australian Government's MoneySmart Budget Planner helps Australians plan their finances better.

What should I do if financial stress becomes too overwhelming?

Don't hesitate to seek help. This could be in the form of money management classes, financial planners, credit counsellors, or even mental health professionals to cope with stress.

How can hiring a debt collector benefit my business?

Debt collectors, like Advance Debt Collection, take on the responsibility of collecting your debt, leveraging their expertise and tools, ensuring you get your dues while also adhering to Australian debt collection guidelines.

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