Financial SMARTS for Small Business

Business Success Factors

Delegate Like Crazy

Know your numbers

Do it

The objective of every business owner is to improve business performance. When your business is performing well, it takes less of your time, makes more money and moves you closer to your life's goals.

To increase your business performance, you must improve your business practices by increasing your business capabilities.

Business Capabilities
Business capabilities are the knowledge and technical expertise in the 4 main areas of business. You improve these by reading books or hiring expertise.

Business Practices
Business practices are how you use this information and apply it to your business. These are the systems you put in place and the procedures you do in the running of your business.

Business Performance
Your business performance is a direct result of how well you perform your business practices. You can see increased business performance through increased profit, decreased stress and an easy, well-functioning business.

Financial management is the skills and knowledge of how to deal with money. It is understanding your financial statements what they tell you about how you are running your business and how you are doing in your business.

This understanding leads to knowing what information you need and how to get it. You'll have a frame of reference to determine how your financial information should be handled to give you what you need.

Once your systems are in place, you'll be able to monitor your progress. You'll be able to know what's important and set financial goals that will lead you to success.

Marketing

Before you begin your marketing you should have clearly defined goals. I hear you saying you just want more business now let's get on with it. But first you have to realize there are 2 parts to marketing: the message and how you get it out there. Your marketing capabilities are the ability to define a marketing message that leads to hitting your marketing goals.

Automatic marketing is a system that leads potential customers to you and provides them the information to make the decision to use your services.

Marketing success comes when you have the number of great clients you want.

Human Resources

Skills such as empathy, delegation, communication and motivation are the building blocks necessary for human resources. Using those skills, your relationships will develop and you will achieve strong interpersonal relationships.

Operations

This is the what of your business. This is how you produce what you do, what you sell.

Clearly, you or your staff must have the skills to do what is necessary.

STATEMENTS
Financial statements give you a precise measure of how well you are doing.
MEASUREMENTS
Successful business owners focus on a couple of key figures, watching how they change over time. The specific measurements change over time and depend upon the business practices you are tracking.
ASSESS
The numbers tell you if what you are doing is working or not. Are they trending up or down? Which way do you want them to go?
RE-EXAMINE
If you are not getting the numbers you want or you want to improve your results, dig deeply to determine which functional areas can affect your results.
TACKLE SOMETHING NEW
Once you know what areas to work on, try something new. If you keep doing the same old things you will keep getting the same results.
SUCCESS
Success comes from continued improvement. Small increments, over time add up to big improvements.

What's the best way to get my Financial Statements?

The best way to get your financial statements is to get someone else to do them for you and present you with the results. There are several important reasons why I am making that statement and only one of them has to do with the fact that this is what I do.

The most important reason to get someone else to do your books is that it is not what you do. You do your business. It is what makes you your money. Your time and energy should go towards managing and growing your business.

If you get someone else to do your books, you have another set of eyes on your books looking for opportunities and anomalies. When you pass it off to someone who does books for several different companies, in different industries, you get a wealth of experience on your side. You get someone who knows and can share the best practices available.

Bookkeeping and small business tax can be tricky. It is important to have someone who is keeping up with the latest information doing your books. Make sure your bookkeeper has access to several good, reliable sources of information.

Your focus should be on making your business work better. Use your strengths and delegate the rest. If you find bookkeeping, or any task, saps your energy, pass it on. I tell people, "We can do your books faster than you can worry about it".

The value of the information is in your financial statements not in the entering of the receipts. When you transact your business, when you sell things and buy things, you know what you are doing. Taking your time to sit down and enter each one of those receipts will not give you any more information. It is not until they are compiled and presented to you in a standard format like a profit and loss statement that you can start to look at your information and see how you are doing.

This advice applies to all tasks that sap your energy. It may seem like it doesn't make sense to pay someone to do work that you can do, but if you can spend that time increasing your profit by more than it costs you, you will be farther ahead. Save your energy for the work that is important and that gives you pleasure.

Do what you love and you'll never work a day in your life!