One of the biggest things I’ve learnt throughout my time as a business owner is that money is at the centre of everything. Whether you’re just starting out or have had years of experience in your chosen field, knowing the financial practices within your business is so important in operating a successful enterprise.
For self starters and entrepreneurs such as myself, the idea of managing money can be quite daunting and it’s hard to know where to start. It’s easy to get lost in the idea that your company has to look a certain way, but it’s important to know that no two business models will look the same. There are many ways to go about creating a space in which your business will thrive financially and choosing a structure that works for you will be a personal venture.
That’s why I’ve decided to share some wisdom and get you on the right track to financial success! I hope you find these tips helpful and find a way to put them to good use in your future endeavours.
What Is Business Accounting?
Before you start to put a solid structure in place, you first have to understand what it is you’re building upon.
The fundamentals of business accounting cover all of the systems used to record, analyse and interpret financial information. Knowing the ins and outs of these systems will allow you to make more informed monetary decisions in your company. You will also need some sort of working capital in order to bring something off the ground, which means your current liabilities such as loans and payroll need to be accounted for.
I’m a big fan of checklists and these will come in handy when keeping track of things such as budgets, tax returns and monthly statements. The systems you have in place should all lead towards generating a stable income and should give you an indicator of how well your business is performing.
As tedious as all of this is, it will be a vital role in your success and you must be well versed in the basics in order to build a strong foundation.
Building Your Team
This is where everything will start to come together and feel real. Once you have a comprehensive payroll and people that you’re accountable for, you will start to take things a lot more seriously than you already are.
Your team will be one of your strongest assets and will allow you to delegate the workload accordingly so you don’t feel overwhelmed. Bringing on the most suitable people is a key factor in deciding your structure, as these will be the people responsible for a lot of financial movements in your company. Having a team of capable and driven individuals will allow you to move smoother and you will really start to see your goals come to fruition.
I would recommend having a monthly review sheet to track progress and make sure everybody is achieving the things they need to. It’s a great way to stay organised and remind yourself of your plans for the future.
Hiring A Bookkeeper
Knowing where to start in terms of financial decisions is half the battle, but the good news is you don’t have to go it alone!
I’m not saying this just to toot my own horn, but hiring a bookkeeper will do wonders in managing the logistical efforts of your business. For those who may not be as well versed in the monetary aspects, bookkeepers are there to help you keep track of cash flow and assess the financial health of your business. Depending on the size of your company they may even take on basic accounting duties as well.
It’s a viable option for those who may not be able to handle all of the workload or are just starting out and need some guidance.
Build To Exit
In 2018, I wrote and published the book “Be The Boss” which acts as a blueprint to financial success in business. One of the things I talk about is being built to exit, which means setting your company up in such a way that one day it will generate income without you there.
Having a dedicated team and the correct procedures in place will make your company more attractive to investors and when the time comes, make it an easier transition for you to exit. Your goal should be to start bringing in passive income, so your finances must be structured correctly. This means staying on top of long term and short term debts and knowing how much equity you hold as a business owner.
By having a strategy in place that allows you to exit, you will have all the more control over your company. Once you have everything set up and running correctly, your business should be stronger than ever.
No matter where you are on your journey, having a comprehensive structure in place will help you immensely. Remember that everything will be a learning curve and you may not find ways that work for you the first time around. Aim to measure the successes and grow from the things that didn’t work so you can optimise and reiterate. At the end of the day, your business should be something that makes you feel proud and the way you operate should reflect that.
Best of luck to everyone!