Financial Checkup for Small Business Owners: Key Tips and Strategies
Let’s dive into a whopper of a topic today: finances.
I am convinced that through the years I have done every single method-or lack thereof-of financial tracking for my business.
Assessing Your Business Finances: The Journey So Far
Used my personal checking account and just “tracked” business expenses.
Finally opened up a business checking but pulled all the money out each month.
Started using a “lightweight” financial tool that did lukewarm reporting.
Filed Schedule C’s and paid through the nose for taxes after my profit was way over what my once-a-year-accountant predicted.
Once I started taking my business seriously and treated it like a true profitable business, I changed my tune–and my financial plan. Since getting it together, things look a bit different.
Improving Your Financial Picture: Essential Steps
Hiring a bookkeeper.
Then hiring an accountant.
Purchased real (and frankly, AMAZING) accounting software.
Changed my formal business structure so the Feds don’t bury me every April.
Now have quarterly reviews of the financials with real reporting that is truly my favorite meeting I have four times a year-thanks to the accounting team for being the damn best.
Hired a laywer for compliance.
Now, is all of this right for you and your business? No, of course not.
Every business IS in a way, that special snowflake you think it is. No solution is a one size fits all. With that being said, I do believe that running a business requires some level of big girl pants. And that includes taking an honest look a few times a year at what is happening with your balance sheet. I usually like to do this in Q2. However, I don’t know about you, but Q2 was a mess. Thanks, COVID-19. So let’s do Q3 and call it good.
Here’s what I do and what I like to look at:
Review my goals for the year. What numbers did I want to hit? What did I want to cut? You do have a budget for your business, right? If not, don’t fret. It’s really never too late to start. I swear. Go into Google Drive and pull up a business budget template in Google Sheets. Done.
Evaluate the burning fires. What risks are you running up against? What things are threatening your profitability? You may not be able to totally quell these (hi, pandemic), but you can at least be aware of them and mitigate them the best you can.
Uncover opportunities. Where can you cut costs? Where can you bring in new revenue? Is there a stream you haven’t tried or have thought of but keep putting off? Crazy ideas aren’t always that crazy. Boldness is the blood of business owners. You think that’s not you? I bet you’re wrong.
Pull out the reports. Look at your Balance Sheets and Income Statements. What are they telling you? Where do you need adjustments? If you don’t have these, then hire my gals–STAT. Look, it’s hard to spend money on services and consultants. I get it. But the bottom line is this: your business is an investment. It is arguably your biggest one you’ve got. You have poured money, your irreplaceable time and tears into it. You cannot let it fail due to oversight of something as crucial as finances. Don’t stick your head in the sand. Let these women hold your hand!
Need all of my long-winded advice in a pretty list and need those details of my people? We’ve got you covered.
