5 financial tips for business owners
Happy New Year, gorgeous—2015 is here, and this will be your year. You can feel it, and you’re ready to tackle your list of resolutions. And, as a business owner, you’ve set the bar high for more sales, more brand awareness, and taking your game to the next level.
But is your business ready to handle the increased sales? Is your financial foundation solid and able to withstand the business growth you have planned for 2015? Oftentimes business owners focus on revenues and bringing in more money, but the other side is expenses and maintaining a healthy profit margin.
In 2014, women-owned businesses were on the rise and contributed $1.4 trillion in the U.S. alone. However, 70 percent of women-owned businesses only generate $54,000 per year in revenue, and only 4 percent of women-owned businesses will ever break the seven-figure threshold.
If you want your business to be financially successful, you have to make sure your financial foundation is set up from the beginning. You can think of it like setting a goal to lose 10 pounds: you can hire a personal trainer, nutritionist, and workout five days a week, but you won’t see any real progress if you don’t set yourself up for success by creating an environment that supports your healthy lifestyle. That includes removing the Chips Ahoy cookies from the cupboard, not shopping at the grocery store when you’re hungry, and packing your lunch so you aren’t tempted to grab French fries from McDonald’s.
The same goes for your business success. A solid financial foundation ensures that when you start increasing your sales, you are also tracking your expenses so that you have money left over and something to show for all of your hard work.
Want to get your business financially fit? Here are five steps to get you started:
1. Open a separate bank account to use only for your business. This helps you stay on top of your business finances and makes it easier to file your taxes. 2. Choose a bookkeeping program. For most businesses, the best program is Xero. Once you set it up, calendar a weekly date to review your books. Xero’s pricing starts at $9 per month. 3. Calculate how much it costs to run your business on a monthly basis. 4. Review your services or products and their related pricing. This is the time to restructure your offerings if you want to increase your revenues. 5. Write a business plan. Most people think that a business plan is only to be used to attract funding, but it is essential to have if you want to be successful. Make sure you include your marketing strategy, budget, and revenue goals. In your budget, don’t forget to include your salary. Getting into the habit of paying yourself a salary is a good practice to help you separate your business and personal funds. If you need a business plan program, check out LivePlan.
For more tips on how to get your business financially fit, visit www.danethadoe.com for a free 30-day calendar with daily business finance tips.