As we start a new year, many people are setting new personal fitness goals for themselves. However, as a business owner, you also need to be looking to ensure that your company is financially fit and healthy. Do you fully understand the strength of your financial situation and the areas that need focus?
Here are six simple tips to help you ensure your business is financially fit:
#1 – Set a Goal
Ask any personal trainer if it’s a good idea to set fitness goals, and they’ll respond with an emphatic “yes!”
The same rings true for your business’s financial fitness. Setting goals is a great way to ensure that you’re on track for success.
Remember that your goals should be SMART: Specific, Measurable, Achievable, Relevant and Time-based.
- Reduce expenses by 5% by the end of Q1.
- Set aside enough capital to open a second location within three years.
- Hire a full-time marketing manager by the end of Q3.
#2 – Create a Plan to Achieve Your Goals
Once you’ve set your goals, it’s time to create a plan for achieving them.
If your goal is to reduce expenses by five percent by the end of Q1, then list out specific areas that are ripe for improvement and identify potential solutions. For example:
- Reduce postage expenditure by implementing an online postage system.
- Implement a more efficient way to track inventory.
- Create new systems to increase productivity.
- Increase hybrid working hours.
- Relocate to a smaller office space.
#3 – Track Your Progress
Just as runners track their miles on their Garmin watches or weightlifters keep a log of their sets and reps each session, business owners should keep track of their data in order to track progress and identify trends. However, instead of a smartwatch or phone app, business owners should opt for cloud accounting software.
Cloud accounting software gives you greater financial visibility and anytime, anywhere access to all of the numbers that matter. It simplifies invoice and transaction tracking, helping you manage your cash flow effectively. Cloud accounting solutions also enable you to visualise data, which can help you identify problems and opportunities that might otherwise go undetected.
#4 – Prioritise Cash Flow
Cash flow is one of the most important aspects of a healthy business. If you don’t have enough cash to pay your employees, suppliers, and other bills, then it doesn’t matter how much revenue you’re bringing in – your bottom line will be negative every month. Therefore, cash flow is central to the financial health of your business.
Keep on top of your cash flow by using a tool like Xero.
Xero lets you manage your cash flow to ensure that bills are paid on time and you’re always aware of how much money is coming in, going out, and whether or not there’s a surplus or deficit. You can set up alerts for when invoices become due so that you don’t end up incurring a late payment fee.
#5 – Hire a Consultant/Advisor/Accountant
Just as fitness fanatics hire personal trainers, business owners need the guidance of a quality consultant/advisor/accountant.
A great consultant/advisor/accountant will allow you to tackle the particular problems and pitfalls of your industry using a proven method for success. They will point out where there is room for improvement and identify opportunities for growth that you may have missed. Furthermore, they will coach you through the implementation of these strategies and keep you accountable, ensuring that your goals will be met.
#6 – Create a Culture That Fosters Financial Awareness
Finally, in order to ensure that your business is financially fit and healthy, it’s important to create a culture where employees are actively engaged in improving financial performance. This can easily be done with team-building exercises, like brainstorming new ways to decrease expenses or increase profits.
Hire employees who are enthusiastic about improving the financial performance of your company by providing them with training and access to cloud accounting software so that they can monitor their daily tasks for possible improvements.
Get Your Business Financially Fit With Atek
Don’t wait until hard times start – be proactive about your company’s financial fitness. Track your progress, prioritise cash flow, and hire a consultant/advisor/accountant so that you can avoid paying late fees. Finally, create an environment where employees are actively engaged in improving the financial performance of their company. With these six simple steps, you will be well on your way to getting your business into great financial shape.