So you've pulled the boat close enough to the dock to jump off. Starting your own business can be liberating and scary at the same time. Most small business fail not because of the drive and dedication of the business owner but because of the lack of oversight when it comes to your finances. Improper planning can lead to big tax penalties, which can ultimately impact your operations and cash flow.
Here are 3 reasons why you need to keep an eye on the books and records of your small business:
1. Know where you money is going. As a Dave Ramsey Financial Coach, we always tell people, "if you don't tell your money where to go, it will just leave". The same rings true for businesses. New business owners focus on growing the business and getting their product into the market. If they don't keep track of where the money is going after it comes in, they can find themselves short on cash and unable to fulfill their obligations to their clients. Being intentional with your money and taking the time to project cash flows is critical to a small, growing business.
2. Identify areas of growth. How much are you spending on advertising? How much return are you getting on your money? Is one revenue stream more profitable than another? You cannot do an accurate analysis without organizing your data. You might be missing out on more profitable growth and wasting money on areas that don't make sense. A deep analysis of the data is needed to see if you are heading in the right direction.
3. Grow at the right pace. Growth is great! Growth when you are not ready can be disastrous. The ability to properly manage your cash flow is key to growth and the key to keeping you and your business out of debt! You may be unable to take advantage of a great opportunity because you are not doing the proper planning up front. Don't lose out on those opportunities because you didn't take the time to get organized.
If you need help with your finances and getting your small business organized, contact Intact Solutions Group at www.intactsolutionsgroup.com and let us help!