“You must gain control over your money or the lack of it will forever control you.” ~ Dave Ramsey
Many people start a business because they have a passion. They want to share this passion with the world and earn a living from it. They can only earn a living from it when it’s in a solid financial position. It can only be in a solid position when its finances are well managed.
Whether you’re starting a new business or running a business for many years, you need to remain profitable and sustainable. Too often, businesses are run in a haphazard manner where operational activity takes preference over other key areas. One area that tends to be managed poorly in many businesses is finance. The level of attention that’s paid to this area can mean the difference between having a thriving, sustainable business and one that’s ready to close its doors permanently.
Paying close attention to the financial activity in your business is crucial because it helps you to do the following:
- understand your financial position (e.g. assets, liabilities, equities, income, expenses, etc.)
- track your financial performance and adjust your business course, if necessary
- plan and forecast effectively
- tap into new opportunities for expansion
- meet legislative and reporting requirements
A business can only operate effectively when its house is in order. If you want to run the financial activities in your business more effectively, start by using the following tips.
To stay on top of your business’ financial performance, use one of the free financial systems available online. Many are cloud-based and can be used to maintain accurate bookkeeping records. When you have financial records and reports available at the click of a button, you can get a snapshot of how well your business is doing at any point.
If you haven’t yet done so, get a separate bank account for your business. It’s important to separate your personal finances from your business finances. It’s not only good practice, it also makes your life a lot easier when it comes to legal compliance and reporting. Choose a bank that has a solid reputation and manageable transaction fees.
If you have a small-to-medium business, you’re likely to be strapped for resources. You might not have the experience (or the desire) to manage financial and legislative reporting for your business. If you’re in a financial position to do so, consider using an external service provider to support you with major financial activities, like tax reporting. They can guide you on how to manage your business finances best and ensure that your business is fully compliant. Before selecting a provider, do thorough research and ensure that they are reputable and accredited.
Once you get clear on how your financial resources are managed in your business, you have more control over your long-term growth and sustainability.
You need a professional service to support and guide you in managing your business from end to end. Click here or email us to discover how our coaching services can help you.
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