Written By: Tynan Wenarchuk, Founder, Illuminate
Mine were at least. And if I’m honest, they have a long way to go. Yours just might too.
The Futurpreneur Action Entrepreneurship Summit this past May left me inspired, connected and with a humongous to-do list. I was blatantly made aware of the weak link and Achilles’ Heel of my organization: finances.
Sounds fun, right? Nope. It is daunting, confusing and overwhelming most of the time, especially when you carefully draw attention to this area.
Just like many entrepreneurs, I have a specific skill set (mine is employee engagement and wellness), but don’t actually have formal business education. Many days I wish I did, yet I play to my strengths. I have continually read about business, finances, money management, strategy, etc. but always knew I had much more to learn.
Well, in no way am I finished learning, nor should we ever be. You however, may be neglecting powerful ways to take control of your business. Read on if you want more of this.
Your vision will always be at the mercy of your bank account.
The numbers cannot be ignored. I have tried and so have you. Get a handle on these numbers, month after month. Do not wait until the end of the year, or tax season, to start digging out your receipts and drafting that excel doc. Your business will thrive when you’re in the driver seat of your finances.
Your account and bookkeeper work for you and your business, not the other way around.
As Warren Coughlin presented, countless aspiring entrepreneurs sat with a deer-in-the-headlights look. The statement was dropped: accountants have another purpose besides saving money on your taxes. Entrepreneurs from all backgrounds, including veterans, were guilty of assuming this. Oh, how much we had all been missing. The bottom line is within the trends. Here’s where we get to take action. Call your accountant … now! Get them to send you a MONTHLY report that includes these three critical tools:
- Balance sheet
- Income statement (profits/losses)
- Cash flow
Understand so you can execute… fast.
With these three key pieces of information at your fingertips, you are placing yourself in the driver seat. Learn how to identify trends month-to-month in your business. Where is there growth and where are the pitfalls? Take action and be completely unafraid of changes. [Here’s an awesome resource to learn more about this.]
Your cash can flow like a river.
Alex Glassey is an expert on this subject and here are some paraphrased thoughts he shared:
- Your business = your decisions.
- Take a firm hold of your accounts receivables and ENSURE that you have enough money in the bank to pay your bills. Specifically, don’t settle for vendor payments having a pay period longer than that of your own bills.
- Someone that doesn’t pay you is NOT a customer. Set a ‘payments and collections’ policy, in favour of your cash flow. Still consider the industry standard but be smart and enforce the policy like your mother does of the cookie jar!
When you’re responsible for your numbers you become something more, disciplined, stronger and prepared for success.
Simply, your not alone in this, guiding your financials is a major pitfall for many entrepreneurs.
I am happily convinced however, that as my skill in this area grows, my business will multiply. Yours will too.
Go. Take action. Be smart. Make some money and feel empowered!