The cost of waiting – Why delayed financial decisions hurt business growth

Why timing beats perfection when it comes to your numbers

Last week we looked at why growth can be an illusion: how a business can post a bigger turnover than last year and still be worse off, once inflation and cost increases are stripped out. Turnover is vanity, profit is sanity, after all. If you missed it, the short version is this: the number on the top line doesn’t tell you what’s actually happening underneath it.

That raises an obvious question. If the top-line number can’t be trusted on its own, what happens to the business owner who’s relying on it to make decisions?

Usually, nothing big, just a delay. But the delay is what costs you.

It’s not the decision, it’s the timing

The businesses that might struggle over the next 12 months won’t necessarily make bad decisions. Most owners have good instincts, they know their industry, their customers, their margins. What catches them out is speed. They make the right call, just later than they needed to.

A few ways that shows up in practice:

• Hiring six months too late – after the team has already burnt out covering the gap or you’ve lost a member of team to that pressure
• Putting prices up after margins have already disappeared, rather than while there was still room to move and clients expect it because the news has educated them to
• Chasing debt once cash is tight, instead of arranging finance while the business still looked strong
• Looking at the accounts once the quarter has already finished or worse at year end. This is like reading a story about a business that no longer exists.

None of these are failures of judgement but they are failures of timing. And timing is a symptom of one thing: not knowing where you actually stand until it’s too late to do much about it.

You don’t need perfect information, you need timely information.

Owners often delay looking at the numbers because they don’t have time to dig through and want a complete, tidy, accurate picture before they act.

A rough picture in July is worth more than a perfect one in October, because July still gives you room to do something about it, start asking questions and investigating problems. By October, the decision has usually already been made for you, by the market, by your cash position, or by your team.

Waiting for certainty feels responsible. In practice, it’s usually just the most comfortable way to put off a decision that’s already becoming obvious.

What timely actually looks like

It doesn’t mean live dashboards or daily updates. For most owner-managed businesses, it means something much simpler: knowing your gross margin, your overheads and your cash position on a monthly basis, close enough to real time that you can still act on what you see.

That’s the gap between annual accounts and management accounts. One tells you what happened, the other tells you what’s happening while there’s still time to change it.

Set your trigger point before you need it

Pick one decision you’re currently sitting on: a hire, a price rise, a supplier change then ask yourself: what number, if you saw it, would make this decision undeniable? A margin percentage, cash balance or a number of overdue invoices.

Write that number down today.

That’s the whole exercise, and it works precisely because it removes the thing that usually causes the delay. You’re not weighing the decision up in the moment, under pressure, with half an eye on cash flow and half an eye on your team. You already did that thinking now, while it’s calm, unemotionally with no clock running. When the number turns up, you’re not deciding anymore. You’re just executing a decision you already made.

Most owners do the opposite. They wait for the number to arrive, then start deliberating from scratch, at exactly the moment they’re least equipped to think clearly about it. A trigger point set in advance is what turns a rough number into an instant decision, instead of another thing to sit with.

The reason for this is because you know the implications of that number, profit falls below £x, no money for summer holiday or worse you need to make someone redundant.

Of course, this only works if the number actually reaches you in time to act on it. A trigger point is only useful if someone is checking for it regularly enough to catch it while there’s still room to move.

Next week, we’ll focus on what “seeing your numbers monthly” actually looks like in practice, what you should be doing with them to make a difference and why it changes what’s possible for a growing business.

What’s one decision you’ve been putting off because you don’t have enough confidence in the numbers? What number would need to show up to make it obvious?