Your numbers: chances are, you either love them or hate them. There usually isn’t a lot of gray area there. They really are important, though – and getting ahead of your finances is essential to your business planning and profitability.
For many business owners, finances and financial reports are things that are either filed away for tax time or (sadly) ignored. Your finances are not a thing to be feared, however – they are a powerful tool. Once you know how to use them, you’ll be amazed at how beneficial they are!
You don’t have to figure out your finances alone, though. By bringing on the right support and having the right financial controls in place, you’ll find that making strategic decisions about your business growth is much easier!
By the way – I’m offering a free training to equip you to conduct quarterly financial audits and use the data strategically. Check it out and register here!
Your Financial Team
One thing that tends to make business owners shy away from their finances is the sheer amount of detail involved. You have a lot going on – you simply don’t have time to keep up with that.
The answer is to hire a great bookkeeper. This rockstar will stay on top of all the details and reporting so that you can focus on serving your clients and building a business that allows you to thrive. From keeping track of both receivables and payables to running and organizing reports, your Bookkeeper will help you stay up to date and ahead of the game when it comes to your finances.
Essential Reports and Your Business Budget
In order to get (and stay) ahead of your business finances, you have to know what they are and understand how they can help you. After all, if you don’t know what your numbers are, you can’t effectively use them to plan and grow.
While every business is different (and will require some different reports), some financial reports will apply to every business – the primary one being your Profit and Loss Statement (P&L). Your P&L will tell you whether you are on track with your financial goals and where your spending may be too high (or too low) for effective growth.
This handy report can help you plan for future hires, let you know when you can increase your marketing spend, and keep you up to date on your profitability. After all, just because you have money coming in doesn’t necessarily mean your business is profitable! Knowing the difference will benefit you and your team in so many ways.
This report also has another benefit, however – it will help you create your budget and keep it up to date. Budgeting is just as important for a business as it is for a household – perhaps even more so.
Your budget is a planning tool, working hand in hand with your business plan. It equips you to project your sales growth throughout the year, which in turn allows you to plan how you will achieve that growth. Your budget also helps you plan product or service launches, events, new hires, and other growth-related events.
For example, when you hire a new team member, there are expenses past their payroll to consider. Will you need to purchase items for their office or cubicle space? A new computer or software licenses? What about professional organization dues or additional training?
All of these items can be factored into your budget, helping to ensure that you are not caught off guard.
As you grow, you will want to make sure that you have the right team members, reports, and budget in place; however, as you grow you will need to bring on someone who can help you strategically plan your business decisions accordingly.
When you’re ready, hiring a CFO is an excellent choice; until then, working with a Financial Coach can help you plan, forecast, and execute your action steps accurately and effectively. A great coach will work with you on a 1:1 basis – and can help you map out a profitable strategy for a fraction of the cost!
With the right systems and support, you can get ahead (and stay ahead) of your business finances, plan for growth, and build a business that allows you to thrive. If my team and I can help you do it, just contact us!