A New Year, New Outlook For Your Business

1. Freedom

I was catching up with a friend over the holidays who was telling me about one of his friends getting made redundant from a small family business just before Christmas. The basic premise of the story was that the bank had told them they needed to make cutbacks, and as part of this they had to reduce staff numbers. They didn’t want to do this, but they had no choice…

As I listened to this sad, but all too familiar tale, I couldn’t stop wondering how many businesses get themselves into this position where they have to go to the bank, and for the bank to then tell them what they need to do to bail them out and avoid closing their doors for good.
Seriously? The bank!?

People are out there running relatively successful businesses, but are letting the bank tell them what they need to do? I’m speculating, but this sounds to me like a business that isn’t on top of its numbers, or is possibly outsourcing the numbers for a retrospective glance every so often when the tax or annual accounts are due.

The truth is, I used to be that guy. I used to hand our accountant a few boxes of receipts at the end of every year and quickly skim over, confounded at the reports that came back, feeling like it had no bearing on the business or the money that was in the bank.

The trouble with this way of doing business is the nagging feeling of not really being in control; the fear of losing a key customer, or contract. A great period of sales followed by a higher than usual tax bill, or simply costs increasing and profits getting squeezed -all of these things can and do trip businesses up.

Something changed

A book that had a huge impact on me at the time was titled The E-Myth. It stands for the entrepreneurial myth — and the premise is that most entrepreneurs start a business but end up essentially creating a job for themselves.

The key is to realise that you have to work on the business systems if you ever want the business to really grow up and stand on its own feet. I was ready. I didn’t want to work so hard that I felt that if I took a holiday the business would collapse.

There were many things that needed attention — but for me that started with getting my head around the numbers.

Inevitably, this starts with a spreadsheet. And, in my opinion, the simplest way to do this is what ever way makes sense to you. The key is to make a start!

It can seem so intimidating, and feel like an impossible task. But once you’re started, it really shouldn’t be too bad. I’ve written another post on this here.

5 steps to automate your businesses finances

  • Find an online bookkeeping and accounting system that works.
  • Get a bookkeeper to help (can be remote)
  • Prepare a basic forecast
  • Automate your reporting
  • Get some accountability report consistently

(see this article for more)

Excuses

Not having your numbers up to date is not only putting your business at risk — it’s holding you back from making the calculated decisions that could really help the business grow…

I’ve heard business owners making excuses for the past few years: “I really do want to switch to online accounting — but I just don’t have the time” or “My accountant or bookkeeper really likes Sage…” Not having your numbers up to date is not only putting your business at risk, it’s holding you back from making the calculated decisions that could really help the business grow.

New Year

With 2017 just starting, this is perfect time to spend a bit of time looking at the past, and then looking forwards. To do this might take a bit of work. If your accountant or bookkeeper isn’t interested in moving your systems in this direction — maybe it’s time for a change.

Colin Hewitt

CEO and Founder of Float, cash flow forecasting made easy.