Why is it that so many small business owners (SBOs) avoid talking about money as if it were the plague? Many end up leaving their financial paperwork to pile up in the bottom of a stack on their desk all year long until tax time rolls around. Why wait until then to get it all together?
As a coach, when I work with SBOs (some new, some not) this quote from Marc Allen’s Visionary Business rings true, especially when it comes to money matters:
“There are no bad businesses, there are only poor managers. A good manager can take any kind of business and turn it around and make it successful. A poor manager can take any kind of business and run it into the ground.”
Instead of talking about operations – which is equally important – when we talk about money matters the theory is CRITICAL. How much of your money is being wasted? Lead generation and finding new customers may be at the forefront of many conversations with my coaching clients as well as training and mastermind groups, it won’t help you if you aren’t handling the financial side of your business appropriately. And you definitely don’t want to try to find a solution by throwing more money at the problem. Be smart, you have to take care of your finances—it’s the bedrock of your business. Let me share some secrets to fuel your success. Before we dive in, keep in mind that this is only the tip of the financial iceberg in your business. Yet without these three in place, you will without a doubt struggle for a v-e-r-y long time.
3 Integral Tips For Making The Money Matters In Your Business Work Best
- KEEP PERSONAL AND BUSINESS ACCOUNTS SEPARATE. Small business owners should not treat their finances like a personal piggy bank. You should never be using business accounts or credit cards to pay the utilities for your home, mortgage, or even purchasing that long list of school supplies for the kids. This is a surefire way to muddy your business and personal expenses. Not only that, but you will never have a good handle on your business expenses. Only use your personal account for personal expenses. Your business account and cards should only be used in business expenses or purchases.
- GET YOUR OWN PROFESSIONALS. If you want to own a business, then you need an accountant and an attorney. There isn’t enough time in a day for an SBO to even scratch the surface of the rules and regulations behind business ownership. It may be tempting to try – but one letter from the State or the IRS can turn your life upside down – and cost you more than if you already had these people at your beckon call.
- BLOCK OUT MONEY TIME WEEKLY ON YOUR CALENDAR. It could be as little as 15 or 30 minutes but carve it out in stone to give you time to work on the books. Not only does this keep you on track with accounts payable and receivables, this will cost you less when you sit down with the accountant or bookkeeper. Also, you will have better insight into the operations of your business. You will see where money comes from, where your money is going, and what is left over.
Cash flow, which is money that comes in less expenses, is what makes any operation work and if your cash flow is bottle-necked, then there is a problem you need to address. Staying on top of your books is the first way to catch any red flags that something is amiss. As I said, this is the very tip of the money iceberg that is your business, but these three tips are the beginnings of saving you unnecessary stress and sleepless nights!