Financial Mentality Of Entrepreneurs As A Factor Of Business Management

This article is devoted to systematization of scientific ideas about the financial mentality of people who make financial decisions – business owners and managers. Financial mentality is considered by authors as a factor of business management. The authors try to show how manifestations of the financial mentality affect the potential of the business profitability through the entrepreneurs’ choice of the financial policy type in their company. It is emphasized that the financial mentality is traditionally presented as a subjective factor. And this article is an attempt to characterize this phenomenon from the standpoint of behavioral economics as an objective factor. The authors use the methods of analysis and systematization of psychological and economics scientific literature to consider ‘financial mentality’, its nature, role in the modern management and relations with other phenomena. The financial mentality of entrepreneurs is considered a system of conservative, moderate or aggressive principles of asset formation and financing. It is noted that financial mentality influences the business profitability potential through entrepreneur’s choice of the financial policy type. It also determines the acceptable risk level by making important business decisions, causes differences in the structure of financial sources and directions of using financial resources of companies, their cash flows, and profitability levels.