Business Owners

TIPS FOR NEW BUSINESS OWNERS:

1) Invest in a bookkeeper:  You’re the ideas person.  You’re the revenue generator.

The time that you spend on the daily input of your expenses and your invoices, takes away from the time that you are spending on generating more revenues.  And the busier you get, the more invoices you need to generate and the more expenses you need to record which means that you need to find more time to input these items into an accounting software program like Quickbooks or Simply Accounting.

2) Review your business financial statements at least once a quarter.  Preferably every month.

Using a bookkeeper doesn’t excuse you for not monitoring the health of your business.  And for the monthly and quarterly reviews, you want to appreciate certain parts of these reports.

  • Balance sheet:
    • Cash – do you have cash in the bank?
    • Accounts Receivables – has it increased from the previous set that you looked at?  (Last month? Last quarter?)
      • If it has increased, why?  Are there some customers that have been outstanding for a long time?
    • Inventory – what has the movement been in your inventory?
      • Increasing or decreasing?
        • Do you need to increase production or slow it down?
    • Accounts payable – what is currently due?  Do you have the cash to pay for these?
    • Loan balances – any amounts due in the short term?
  • Income statement:
    • Revenues – are they where you thought they would be?
    • Cost of sales/services – are they less than your revenues?
    • Gross Margin – is it in line with your targets
    • Overall expenses – do they seem reasonable?
    • Net income or loss – are they matching to what your expectations are?
  • Cash Flow statement:
    • Overall review
      • Review it to see if it makes sense.   This report shows you how the cash came into the company and how the cash left the company.

3) Goal setting

You can figure out how you’re doing if you don’t know where you’re going.  Spend the time to figure out how you want to see your business year unfold.  This will help you see if you’re on track to success or if you need to make some revisions if things aren’t going according to your plan.