No doubt your goals when running a small or family business include creating wealth for the business and gaining adequate returns on the risky investments your business will undertake. Accomplishing these require good strategic planning and effective finance management. But financial management requires more than bookkeeping. Financial consultants have three principles they follow in order to effectively manage a small business’ funds and ensure their books show lots of profit at the end of the month:
Your family business may rely on personal funds at first, but those will quickly drain if your business doesn’t sustain them. For both family businesses and other small businesses, you may need to fund employee salaries, invest in equipment or goods, or lease office space on credit before revenues can cover your costs. Where, when, and how you fund projects is all part of Financial Planning.
Take control of your finances! Set up measures to determine whether projects you’ve undertaken are meeting their stated financial objectives, and whether the finances generated by these projects are secure and efficient. Also under Financial Control is making sure your business management team is acting in the best financial interests of the shareholders and operating in accordance with local and national business finance regulations.
What will you do with your business profits? Which source of financing will you use to fund your next project? The answer to these, and other financial questions that require decisions to be made, are actually more complex than you think they are going to be. A bookkeeper or accountant will be able to guide you through the process of calculating out which projects will be financial windfalls- and which ones should be avoided entirely.
A Fisher Business Management consultant can help you crunch some numbers to tell you how profitable (or not) a project will be, and how long it will take to reach your ROI. They then help you with the Financial Planning aspects of the projects you want your business to take on and with taking Financial Control of your current or new projects. Our small business consulting firm is there for you as a team, so that you can make wise financial decisions both now and in the future.
Barb is the CEO of Fisher Bookkeeping, an outsourced bookkeeping consultancy that provides small businesses with a full-service financial department. Her favorite aspect of work is to break down the accounting to meaningful bits, so entrepreneurs can make a powerful difference in their own business. She's also a power lifter (squat: 215, DL: 270).