> A Balanced Life
> Business Management
> Customer Service
> Finance
> Marketing
> Recruiting & Training

> Franchising Video
> Photo Gallery

> Candidate Qualification Form

Did You Make Money or Lose Money Today?

Small-business owners like to believe they have their finger pressed firmly on the pulse of their company. When it comes to the financial health of their business, most owners neglect to regularly monitor their company’s vital signs — and lose money in the process.

When was the last time you checked your company’s financials? What were your margins last month, last week, or yesterday? Were they up, or down? Unfortunately, many small-business owners don’t get around to checking the numbers in the books until tax time. According to nationalbusiness.org, a recent study by the U.S. Bank shows that these owners pay for their lack of attention: 82 percent of businesses that failed did so because of poor cash-flow management skills.

Pay Yourself First, Not Last
Implementing a system of checks and balances to monitor your company’s financial health should start with a simple question: How much money do I want to make? Okay, the answer to that question isn’t as easy as writing your own paycheck, but not as impossible as it sounds.

Most small-business owners have no idea how much they’ll earn each year because they don’t set their business up to generate a steady cash flow. An owner should be paid a predetermined salary, not simply what’s left over.

Manage Your Business for Profit
Earning a steady salary doesn’t necessarily require that you jack up prices. But a small-business owner shouldn’t be afraid to price for profit.

Many owners price their services based on their competition’s fees. A stealthy phone survey of competitor prices may tell you how much the other guy is charging, but it’s not telling you whether or not he’s making a profit. Are you willing to follow the competition into bankruptcy? Remember, price for profit, not just to get the job. Your prices should weigh your desired revenues against your expected costs for items such as labor, supplies, and overhead.

Keep An Eye on the Prize
Now that you’ve done the math, don’t let your financial plan run on autopilot. The numbers constitute a formula that will work only if you manage your business to match them. You must pay attention to the successes and failures of your financial system on a regular basis and make adjustments as you drive toward the prize.

Long-term goals such as an annual sales mark set the bar, but you also need to set a monthly, weekly, and even daily number to serve as a measurement of your success or the challenges ahead. Don’t keep these goals in your head. Put them down on paper. Share them with your employees if you’d like. Only a small percentage of small businesses bother to set goals, and of that, even less write them down.

The use of computer business accounting software can help you monitor your company’s progress toward your financial goals easily and regularly. Business accounting software updated with the day’s results can show you reasons to celebrate — or the need to regroup.

Deal with Trouble Early
If you’re consistently displaying negative numbers, it’s time to consider adjusting the elements of your company that affect sales, revenues, and costs. Installing systems to monitor your business’s financial heartbeat will go to waste if you simply watch negative results grow over time. And often, a small but timely adjustment in your customer service, marketing, sales, or service systems will show positive results in your numbers, so long as you’re paying attention.

< Back