Business Finances

Is your business scalable, salable, and profitable?

Plan for Financial Success in Business

Stop and think:

What are you doing to proactively ensure your business remains profitable?

As with all things business, proactivity is better than reactivity. Finances are no exception.

Business Must be Profitable 

Business works best when you’re passionate about it, yes. But that doesn’t mean you do it for free. That’s a hobby. You should get paid for the time, resources, and energy you invest in your business. 

A profitable business is an asset. Profitability is the one objective measurement that everyone can agree indicates a successful business. 

Business Finance Strategies

As a business leader, there’s a lot on your plate. Finances can often get neglected until there’s a problem. But this can be detrimental to the future of the business.

Here are some strategies to have in place to make sure you are in control of the finances of the business…and the finances don’t control you.

Set (Realistic) Goals

With a target for your business, you’re able to stay focused and keep a team on the same page. Goals must be realistic, attainable, and include a timeline. 

Set business goals regarding:

• Revenue
  • The big picture of a business requires that you look at revenue. How much money do you hope to generate? This is the first necessary step to a profitable business. 
• Profit
  • The profitability of a business is objectively what determines how great of an asset it is.  Build this goal backward. Analyze your expenses. This also means managing any debt to maximize a company’s net worth. Then establish a goal based on what’s necessary to break even plus what’s required to hit additional goals (income, savings, debt, etc.). Is your business salable?
• Savings
  • Even if this is just a small amount, a business needs savings. The past year is proof of this. Will your business be able to weather recessions, pandemics, or slow seasons?
• Growth
  • Where do you see your business growing? How can you ensure it is scalable? Taking time to reflect on this helps you make sure you’re doing what’s necessary to achieve it.  

These goals should also tie into the bigger picture of your business’s mission, vision, and purpose. By making and managing money well, a business will continue to operate and fulfill its bigger purpose. 

Ask, Learn, Grow

It’s estimated that less than half of business owners have a college degree. Some surveys only estimate about one-quarter of entrepreneurs have a bachelor’s degree. 

One of the beautiful things about business is the way good ideas are recognized and rewarded. 

The drawback of this is sometimes it takes more knowledge than we have.

Your organization’s success depends on your ability to seek answers and resources to teach you. 

• Ask (or hire) an accountant.
• Read. A few of Beth’s favorites are:
  • Scaling Up by Verne Harnish
  • Profit First by Mike Michalowicz
• Become familiar with whatever systems you use to help manage and automate your business’s money.

Establish Systems

Manually doing all the work that business requires of you will lead to burnout. Automated systems need to be established early, and money management that needs to be done manually needs to be put on the calendar. 

Tools like Quickbooks and other Client Relationship Management software can help keep financials automated and visible, thus making it easier for you to track and measure your progress. 

Schedule Time To Assess Progress

Goals are only helpful if there’s follow-through. Every business has different needs, but time should be set aside weekly, monthly, quarterly, and yearly to track and measure progress toward business goals. 

Allot time on your calendar to:

• Check payroll and hours
• Compare monthly revenue to goals
• Compare monthly revenue to previous YTD
• Analyze business expenses
• Input numbers into the business budget
• Adjust the monthly budget
• Track progress toward goals
  • Celebrate
  • Adjust 

Progress Leads to Success

Your business is your livelihood, and its future needs to be protected. Small changes over time will produce big results. Make a plan, set goals, and give your business a target. You deserve to get paid for what you do, and you alone have the power to make sure that happens.