New Year, Better Business
Review & upgrade your accounting
Have a good hard look at your accounting systems- are they really working for you? Even if you’re a small business, it isn’t good enough to just use a DIY spreadsheet. Invest in a bookkeeper or at the very least, some proper DIY software to keep things accurate and clean.
Review ya costs
Sounds obvious, but when you’re flat out things slide. You need to track ALLLLLLL of your business expenses. They add up quickly and a quick tune up will force you to look at what you’re REALLY spending…..
Project, project, project!
Grab your accountant, run some reports and make some financial projections. You want to have a few business goals in mind and you want to find out what you need to spend to get there. If you’ve got a strategic plan or a business plan (PLEASE TELL ME YOU HAVE A BUSINESS PLAN!) use them to navigate your financial projection and manage possible obstacles.
Invoice like an influencer
Get your invoices out ASAP. Set your payment terms to 7 days so that your invoices aren’t lost over time and you see the cash rolling in steadily. Always follow up on your invoicing, you can create a template to be emailed or texted out which is much easier. Reference your invoices and cross reference these with payments
Separate business & pleasure
Business money and personal money shouldn’t mix. Keep separate bank accounts to avoid unexplained losses and tax disasters. When you keep business separate, you can get far better insight into profitability and keep track of your real costs.
Keep track
Keep meticulous records of what you loan your business. This will make it easier to pay yourself back once your business is making money.
Pay Yo’self
Get into the habit of consistently setting aside money for yourself to test how profitable your business is. How much will be influenced by living costs plus desired addtionals.
Be a tight arse
It’s tempting, but don’t get caught up in the glitz and glam of business ownership. Set yourself a low (as comfortable) salary. This will ensure agility when you need it.
Travel like you’re broke
Business and travel mix very well- as long as you do it right. Don’t overspend (obv) and plan your business trips as though you were planning them for yourself. This sets the cultural expectation for staff as well. Keep those pennies for genuine flourishes that support your business and show your staff you appreciate them.
Keep legals on a leash
Legal fees can be a cruel shock so when engaging in legal services, consider whether your business can really afford it. Always make your expectations clear with your lawyer/solicitor. Choose the most cost effective billing option - hourly or per project and ask if they can defer payments until the projects are completely funded. You can also look into DIY documents online- there are HEAPS of templates.
Grow gracefully
Don’t chuck money into rapid expansion. Collect and analyse data to inform your decisions, ensuring you are only spending where you need to.
Get other people for HR and Marketing.
Even if you have the capacity to do these things yourself they are complete mine fields. “QUIRKY” is a personality trait and does not equal creative professionalism. Hire consultants to either guide you or do it for you. Build a great working relationship especially with your HR consultant- you will ALWAYS need them.
Rent vs Buy
Renting equipment or premises rather than buuying means you will avoid maintenence costs and prevent you from overspending on stuff you don’t REALLY need. This goes for office space too- what about a co working space or renting your own office to others?
If you need a loan, get one before it’s too late
Once your business has sunk into financial trouble, you will find it near impossible to secure a loan. It is so important to know our numbers and where you’re at because if you make those sad predictions, you need to act fast if you want a chance. Apply for finance when you’re in a good space- keep them up your sleeve for emergencies
Make sure you have enough capital
As a rule of thumb, you’ll need about 3 months worth of living expenses plus the the amount you’ll need for three months business expenses. Yikes. Plan like you won’t receive any business revenue and then work bloody hard.
Premature spending is the enemy
When you start out, wait a good 6 months before spending your cash on fancy signs, business cards or cars. Get a couple of necessities under your belt and veiw them as “good enough for now”. You can clean up your look gradually once you know it’s going to work out. This will prevent cashflow problems at the start- another headache you don’t need.