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Financial Management | Business Plans | Business Budgets www.inverellbusinesssolutions.com.au
Hi, this is Colin Ritchie of Inverell Business Solutions.
Financial management can be the difference between having a successful thriving business and going broke. It really is that important.
Lets talk about 4 key things that all businesses should be doing:
1) Monthly Profit and Loss statements
I believe all small businesses should produce monthly profit and loss statements and spend some time interpreting what those figures are saying about the business.
If you need assistance with that, get it. Simple as that.
Do you think that Coles or Woolworths do monthly figures?
Who can most afford not to, a business making hundreds of millions a year, or your business?
Do you have a budget for the next year?
And are you comparing those monthly actual figures we talked about to your budget and then investigating differences?
Many business owners tell me that they simply can't predict what business will be like so there is no point budgeting.
Let's use an example of another business the has difficulty predicting it's income due to fluctuations.
Take BHP, coal and iron ore prices vary enormously as does the exchange rate. If ever a business wouldn't worry about doing a budget, it would have to be them.
So do you think they don't worry about it and put all their invoices in a giant shoebox and wait for their accountant to tell them if they made any money?
I mean it's laughable to even think that isn't it?
Yet BHP made $15 billion last year give or take a few billion, so who can most afford to not budget with a variable future income, BHP or your business?
3) Business plans
Does your business have a business plan?
I don't mean one that the bank asked you to do and you gave them a copy and put the original in the bottom drawer never to be looked at again.
I mean a real road map of where you see your business going and what you need to do to get there.
Once again, if you need help with that, then we can help you
4) Key Performance Indicators or KPI's
What KPI's do you use to manage your business?
All businesses will have key indicators that will tell you if you are on track.
In a services business it might be chargeable hours. If you get a certain number of chargeable hours you know that you are travelling OK.
In a retail business it may be customer traffic numbers, conversion rate and average sale. You know if you get those areas right that you ar eon track.
So what KPI's do you use to manage your business?
If you need help to set and review your KPI's, or look at any aspect of your financial management reserve your free complimentary meeting with us today.
This has been Colin Ritchie for Inverell Business Solutions.
Inverell Business Solutions 0267223115 http://youtu.be/Tl5em401_ig