So, you’ve been in business a few years. Things seem to be going well. You have a regular customer base, a steady revenue stream, and you have enough money available to make necessary purchases… usually.
Then something happens; Some unforeseen change in the market or your personal life that throws everything out of whack. It doesn’t really matter what that “something” is. If you’ve operated a business long enough, you know that “somethings” happen all the time.
To survive periods of sudden change and unforeseen costs, business operators must be able to act quickly, with the confidence that they’re making the best possible decisions with the information available to them. That’s why it’s essential for businesses to keep detailed financial records.
Running a business is demanding work. It requires your passion, your attention, your innovation, and your perspiration to succeed.
More than that, a business needs a viable plan to turn a profit. That plan isn’t set in stone, and must be able to change to meet unpredictable challenges. Continually setting goals is crucial for businesses who want to grow sustainably and survive catastrophic events.
But goals and course corrections can’t be made without a full picture of your business’s financial health. Many established businesses have incomplete or disorganized financial records. They don’t have current profit and loss statements or financial projections to help them determine the right actions to take.
The first thing I do with my new clients is gather whatever records they have available and build/rebuild as much of their financial records as possible, sometimes going back several years. This information provides all kinds of useful context for making financial projections and setting workable goals.
If you’ve been operating a profitable business for years, you may not see the value in continually setting new goals. Everything’s working out, so why bother? Because setting targets, and working toward those targets will strengthen your business’s financial stability and clarify your choices.
With targets in mind, and an itemized record of business costs, you will be able to create a viable business plan based on measurable results. With smart financial planning and a thorough record keeping process, you’ll have the information you need to make decisions that save you money and improve your business.
What does your business need to improve? More advertising? Different services? A new team member?
Working with financial projections to set goals helps you create winning plans for your business. Keeping detailed financial records gives you the information you need to carry out those plans effectively. Every aspect of your business will be impacted by financial clarity, and always for the better.
Every client I work with learns so much about their business through the process of creating complete, readable financial records. I encourage them to set goals, and give them the tools they need to measure their performance against those goals.
In any environment, these processes will give businesses a leg up when they want to improve performance, or react wisely to a situation that disrupts their ability to operate normally.
Business owners who implement careful planning and record keeping processes have the advantage in any circumstance. And it’s about more than your business. It’s about your peace of mind.
Knowing you have information at hand to guide you toward a proper action or response makes the risks associated with operating a business less… risky. Having repeatable processes for collecting and tracking payments, and recording expenses will streamline your record keeping, in turn improving your financial awareness. And that’s a good thing in any weather.
Align your business plans and goals with financial projections based on your financial statement history and current expectations. This step will likely require professional help. If you’re like many of my clients, there is an opportunity for you to gather and assemble a comprehensive financial record that will provide valuable context to all of your business decisions.
Collaborate with your team and financial planner to develop actionable plans to achieve your business goals. At the end of the day, you make crucial decisions that determine your business’s survival and ultimate success. Listen to the input of those you trust with knowledge about your business, and move forward from there.
Execute your plans over time, and keep track of all your income and expenses along the way. Part of execution means doing what you set out to do, whether that’s a new hire, a new advertising campaign, or seeking a low-interest business loan. Another part of carrying out these plans has to be keeping track of how they work against your projections.
Review your results along the way. Established businesses can’t just rebuild their financial records as a one-time fix. Owners and operators must stay attentive to the financial impact of the changes they’ve made and initiatives they’ve undertaken. How does your overall financial health line up with the goals you’ve set for yourself? If you still need better results, it’s time to make a change.
Adjust your business plans according to the results they produce. Now that you’re tracking all income and expenses through consistent processes and itemized bookkeeping, you have the information you need to make positive changes to your plans or rethink them altogether.
It may seem like a tall order, but instituting the processes you need for financial clarity will improve your ability to make smart decisions for your business. Advantage Insights helps businesses like yours gain this vital clarity and make appropriate adjustments along the way.
Bring your finances into the light. Check out our financial management services to find out what we can do to help your business reach its full potential.
You can even get started with a free consultation to gain a better understanding of what services would best suit the unique needs of your business.
For more information, call 402-281-3785 or email info@youradvantageinsights.com.
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