5 Small Business Financial Best Practices to help your small business grow cash flows. The value of any small business is it’s ability to generate cash. More technically speaking, the true value of a business is the present value of it’s discounted future cash flows. Any viable business needs to understand how to ensure that cash flows remain steady and/or grow. To that end, we have put together 5 Small Business Financial Best Practices that will help achieve that goal. Keeping these 5 Small Business Financial Best Practices in mind as you grown your business will help you remain viable, profitable and successful.

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2. 1
Keep Score
Keeping track of the finances of your small business is critical.
Without a historical record of the financial performance of the
business there is no real business.
By documenting revenue, expenses, assets, liabilities and other
financial items you can track and trend performance, as well as
understand the overall viability of the entity.
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3. 2
Inspect What You Expect
As Small Business owners, we expect to have successful
businesses. But how do you measure “success”? Measuring
financial success means understanding the financial metrics
and KPIs that drive your business.
Without knowing these metrics by heart and on demand, a small
business is left to chart its own course. Inspecting these metrics
and KPIs routinely will help shape a small businesses future.
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4. 3
Price Well
Beware of competing on price alone. Unfortunately, this is a
trap that many small businesses fall into. The price of your
product/service ultimately dictates the bottom-line profitability of
your business. While you can control expenses to increase
margins, pricing your product/service well will make this a
choice not a mandate.
To price well you need to understand the value of your
product/service. What is the market willing to pay for it? What
differentiates my offering that I can charge more for it than my
competitors? Can I improve my offering to increase the price?
Knowing the answers to these questions will help you
understand the value of market offering and allow you to price
according.
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5. 4
Do Your Homework
Prior to entering into any new business relationship, new market
any other potentially financially impactful, move do your
homework. Have a keen understanding of how this move will
impact the overall financial health of your small business.
Think beyond the obvious items such as funding or expenses
and determine the opportunity cost of entering into that financial
commitment. What intangibles do you give up? Value your time
and other “soft” costs to calculate the full intrinsic costs of any
commitment.
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6. 5
Focus
Chasing “shiny objects” and the business trends of the day can
lead your small business astray. Understand what your Core
Competencies are as a business and work on enhancing them.
This does not mean that you shouldn’t look to enter new
markets or broaden your product/service offerings – but do so
strategically.
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7. Forecast, Analyze & Track Your
Small Business Finances for
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