Money, Money: Know Your Numbers
“Intelligence solves problems and produces money. Money without financial intelligence is money soon gone.” – Robert Kiyosake
According to the Small Business Administration, 50% of businesses survive 5 years or more and about 30% survive 10 years or more. Let’s face it, as entrepreneurs, we have sleepless nights thinking about making payroll or having enough capital to perform our next project. However, with a few tweaks to how we approach our business finances, we can beat the statistic and be part of the money machine club.
Let’s drill down further into 3 steps we can take right now to put our business on track to financial profitability:
1. Keep Track of Your Progress
We all have goals. Let’s take an example of a common one: losing weight. One can exercise and eat right and ‘feel’ like they are losing weight. But, without any sense of tracking like using a weight scale or a food journal on what you ate, you don’t know if you are making progress towards your weight loss goal.
Similarly, as business owners, we must take accountability over our progress. This helps with keeping track of money coming in, allocating expenses for the future to buy new equipment and hiring new staff.
Pro Tip: Use the Sales Tracker to keep track of your leads and new business opportunities. You can also use other visuals on white boards and flip charts as well to stay on top and hold each other accountable.
2. Automate using Software
Guess how much time Premier Ponds Owner, Steve Shinholser spends doing payroll every week? The answer: 10 minutes. The secret: Quickbooks. Here is a snippet of how Steve does payroll on Quickbooks.
For a more detailed review of Quickbooks, take a look at the webinar here. Automating weekly tasks such as payroll, taxes, quarterly audits and utilizing the technology out there will help you get ahead of the curve and focus your attention on your people doing the right things.
3. Rinse and Repeat
When you nail down your process of tracking and automating your key tasks, it’s up to you to keep it going. Every quarter, you should be tracking the following metrics and meeting with your team regularly to make adjustments towards staying on track. Credit to Tom Reber for identifyng the key metrics to track on an ongoing basis:
Yearly or Quarterly Goal (Example 2017 Goal)-Sales Goal-Gross Profit Goal-Projected Average Sale Size-Overhead Budget -NET Profit Goal-Projected Sales Closing Rate
Yearly or Quarterly Actual (Example: 2017 Actual)-YTD REVENUE-YTD Gross Profit-Number of Jobs Completed-Number of Total Leads so far-YTD Overhead Spend-YTD NET Profit
Summary: Track it, Automate it, Repeat
The goal to managing your business finances should towards simplifying your process of tracking sales / expenses and streamlining your operations. You should get towards a path that if you left on a 2 week vacation, someone in the company you trust can take the tools and processes you’ve implemented in place and run the ship while you are away.
Don’t worry, if you are still unsure where to begin, contact us and we can get you started with the first steps.