When it comes to business finance and management, majority of entrepreneurs are fish out of water a.k.a. Clueless.
Most entrepreneurs are great at creating a really awesome vision for their business; but when asked to sit and sort out the business finances and the brakes come screeching. This shouldn’t be the case as businesses are built to not only add value, but also make money while doing so. So as a business owner, you are inevitably limiting the growth of your business if you do not make time to take care and PROPERLY mange your business finances.
Lack of proper financial management might be the reason you feel like you’re not making enough money within your business. Lack of proper book keeping also makes it difficult for you to plan future projects and know what’s working and what’s not in your business. So here are a few ways to fix your business finances and get things back on track!
1 – Understand The Basics
First off, as much as you might not like the Nitty-gritty of business finance, it is important you understand the basics. Trust us, we know many like you and from experience, we know it is very important.
Financial Reports, Profit and Loss, Net profit, Gross profit, Cash flow and everything else in between. All these are necessary to know and understand so that terms don’t fly over your head when financial advisors being explained to you. This knowledge will also make you keep some level of control over your money.
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2 – Do Not Procrastinate
There are many ways to get your finances sorted out – Procrastination isn’t one of them. Yes, we know you can get quite busy trying to manage every other aspect of your business but the financial aspect is equally as important. If you feel you can’t handle your business finances as well as run other aspects, get a professional or financial firm to do it for you ESPECIALLY your book keepoing – but do not procrastinate! You can choose a date or time period to work on it right now!
3 – Do Not Give Up Control to Financial Consultants
Remember how we advised that, if you cannot handle your finances you should get some professional or financial firm to do it? That’s still valid, but their job description ends at helping you sort out your books, find out where you are losing lots of money and how to stop it from happening again, how to save and how to handle your taxes ( give or take a few other things).
Never leave the job of making financial decisions to your finance consultant(s). Do not give them that chance to do so on your behalf. You should take sound advice from them, but always be the one to make the final decision. It is your business, after all.
4 – Understand Your Sales Cycle
If you are like most businesses, you have a sales cycle. At some time in the year, your cash flow is high and at some other time, you have a limited cash flow. This is normal. However, it is a financially smart decision to plan ahead such that you put enough money aside during your months of abundance to help you stay afloat comfortably during the leaner months. This is because regardless of what time of the year it it, you will still need to pay the bills, pay salaries, office supplies and so on.
5 – Grow Your Business Beyond You
When you start up, it is usual that you do everything in the business. The income of your business is directly tied to your performance. Even when you begin to take on new people, the tendency is still to hold on, since you have grown attached to your business. Nonetheless, the truth is, if you really love your business and you want to increase your Cash in-flow, you must set up systems and learn to delegate jobs to different people. This will free up valuable time for you to be on top of things with the business rather than remain stuck in it.
The popular acronym of TEAM is…
Together Everyone Achieves More.
You achieve more when you bring on people and empower them to get their work done. You will never unlock your business’ full financial potential and create wealth if you never let go of everything but the most important functions.
As with almost everything, practice makes perfect. The more your practice these fixes, the better you get at them and soon, even if you aren’t a financial Einstein, you will be savvy enough to start turning in the millions with dexterity.
Isn’t that what we all dream of? Let’s get started!
Need more information? Take this course to learn more ! – Understanding the Basics of Business Finance