Mullen Stoker

Chartered Accountants in Durham

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Are you familiar with Maslow’s hierarchy of needs? The theory, put forward by American psychologist Abraham Maslow in 1943, rests on the premise that human beings are motivated by their needs. The needs are often shown as a pyramid, with the universal needs of society – things we need to survive, like food and shelter – at the bottom, leading to the individual’s self-actualisation at the top. If some of our most important needs aren’t met, we might find we are unable to progress. We get stuck. 

We believe that basic theory can also be applied to businesses. Every business should have the opportunity to thrive and grow, but all too often they get stuck at a lower level because the basic needs aren’t met. 

What are the needs of a business? Let’s take a look, starting with the most important. 

The five needs of a business 

  1. Survival – to survive, your business needs to know its numbers. Your business is numbers. 
  2. Safety – your business needs solid foundations and good insurance to keep it safe. 
  3. Love – your business needs good people in it; people who respect your customers and care about how they are looked after. 
  4. Esteem – your business needs confidence in its endeavours; it needs to be the expert in its field. 
  5. Self-actualisation – your business needs to be ethical and moral. 

Get the foundation right 

The thing is, even though we show survival as the top need in our list it’s actually the foundation that underpins everything else. When we view the hierarchy as a pyramid, we see that quite clearly.

That survival level involves knowing your business numbers. The numbers show you how the business is performing, what it has the power to do, and what its chances of survival are. You can see how much is coming in, what the outgoings are, if there is cash for expansion, if your cash flow is reliable. You can use ratios to gain more information and dig deeper into the financials. 

Your numbers might show that the growth you have planned can go ahead. But if those numbers show the business is built on weak foundations – remember, if cash flow is problematic, even a profitable business can flounder – then you know you have to address those issues and strengthen the foundations before you build higher. 

Where is your business on the pyramid? 

Are you confident the basic survival needs of your business are met? Are you building the business on a solid foundation or might it all come crashing down? If you know your business numbers, they will be guiding your actions. If you aren’t sure or would appreciate some clarity, we can help. 

You don’t need to be a current client to find out more about your numbers and get clarity on your business finances. Our motto is: Creating Time, Money and Headspace for Business Owners, and we can do that for any business owner. You can learn what it feels like to be supported and have a sounding board for your ideas without any commitment up front. 

Mullen Stoker can help you understand your business numbers, get clarity on business finances, and ensure the needs of the business are met, so you don’t get stuck at a lower level. Give us a call now on 01772 963050 to arrange your business numbers session. 

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