What is the most important aspect of running a business to ensure success? Answers on this question can be varied, some would say Sales, some Marketing, Leadership, Systems etc.
While they are all vital to success, in our experience one element that trumps all others when it comes to successful businesses is ;
Financial Acumen; the ability to make smart decisions with an overall understanding of the financial factors and the outcomes of those decision
Here are 3 tips around finance and success;
- Set Financial Goals
In your business plan (assuming you have one and even if you don’t) you need to address key questions about how you make money and what your financial goals are.
Answer the following;
- How will your product or service generate money?
- How much money will it generate?
- How much does it cost to produce your product or service?
- How do you intend to pay operational costs and employees?
- How much do you want to make weekly, monthly, yearly and what do you need to do to make that happen
These are only some of the critical financial questions you need to answer in planning your business. You need to know the answer to these and more before you start your business to ensure you will be a success.
- Separate Your Bank accountants
- Separate Personal and Business Finances
Before clients come to us they often are using their business account for personal use and it can get messy. We advise to always keep your personal and business finances separate. This should help you track your outlays and keep you in control.
- Have a Separate Savings Account
We also advise you set up a savings account dedicated to your business, here you can transfer a certain amount of money from each payment that you receive and gradually build it up. You can then use this money to pay taxes / VAT etc.
- Embrace Technology
Business owners who we work with that have moved to online accounting all have the same thoughts; ‘they wish they did it sooner to help manage their business.’ If you want your business to work smarter and faster, cloud accounting software is a wise choice. Working in the cloud will give you a better overview of your finances, and improve collaboration with your team.
Online Accounting can
- Give you a clear overview of your current financial position, in real-time.
- Give you access to automatic updates from your bank account information, meaning you can spend more time doing what you love.
- Ensure everything is backed up automatically.
- Reduce Upfront business costs– version upgrades, maintenance, system administration costs and server failures are no longer issues. Instead, they are managed by the cloud service provider.
We use Xero – It’s great! Want to find out more? Click here