You’ve Built a Successful Business: Now What?

In building a successful business, you achieved one exciting goal after another, but operating efficiently after achieving your goals is just as challenging. While financial management may seem mundane compared to the thrill of those early startup days, the steps required to maintain profitability demand the same care and dedication as you needed then.

Here’s how to keep yourself on the path of enjoying entrepreneurship:

Friend your financials

Those numbers in your bank account are important; big-dollar figures there translate into ways of enjoying life. But that great bank balance is a result of making the right decisions. By paying attention to the numbers, and understanding your financial reports, you’ll gain insight into your situation and find where you need to focus your attention so you’ll make the right decisions.

No matter how smoothly your business is functioning, it can stumble badly from neglect. Staying on top of your financial circumstances is crucial: Always have access to timely and accurate financial statements, and maintain up-to-date accounting that reveals the status and trends of revenue, expenses, accounts payable, accounts receivable, and inventory.

Energize with experts

In the startup phase of your business, you were responsible for bringing an idea to the market, making sales, and creating a brand image. Multiple additional processes are required to operate a mature business, many of which are not core functions. These you can outsource, so that your concentration remains focused on the most important functions.

Look for outside parties you can call upon for IT assistance, physical inventory counts, tax preparation, and bookkeeping.

Build with a budget

One of the vital elements of any successful business is developing a budget process. Your accountant can help you create a system that compares results to expectations. Following a budget is the best way to assure optimal management of cash flow. The budget shows you where to spend money as anticipated revenue is captured. By taking action in accordance with your budget, you will maintain sufficient cash as your projected income and expense targets are realized.

Tackle tech tenderly

Investing in technology is the best way to accomplish your business routines quickly and efficiently. But not every tech tool available is the right solution to improving operations. Investing in technology makes sense when an automated process frees employees to deliver more or better service. However, these investments have costs – including training time – that might exceed the benefits.

Another option to implementing new technology may be the better choice. For example, hiring an outside service for payroll preparation could create more value than purchasing payroll software and dealing with internal data entry issues.

Focus on flexibility

Prepare for and embrace change. Invariably, something will happen down the road that you’d never have anticipated today. Remember that a small business is nimble and better equipped than a big company to adjust plans. Be ready by knowing your financial situation and understanding the viable options so you can change direction quickly.

ID Pricing Issues Before They Strangle Your Business

A shrinking profit margin is the kiss of death for your business, and all too often the culprit is a pricing mistake.

Failure to make pricing adjustments happens in all types of businesses: Retail operations neglect to update their automated price scanning systems, and independent contractors ignore vital cost factors when negotiating prices.

Savvy entrepreneurs notice price trends by examining their financial statements for changes in profit margin. This allows them to adjust prices before mistakes are perpetuated.

To spot problems early, you need the right accounting system, one that records sales by type of income: Retailers, wholesalers, and manufacturers should create categories for each item sold, and service contractors should have income accounts for each service or contract.

The next step is accounting for the cost of each item or service to determine the profit margin for every type of income. A falling margin signals increasing costs: Retailers will reset prices for certain income types, and service businesses will increase their future bids for certain kinds of contracts (such as those requiring costly travel.) In both cases, you’re honing in on those items or services that deliver reduced profit margins.

You may have to outsource your bookkeeping to obtain the kind of information and expertise you require from a more sophisticated accounting setup. However, the cost of upgrading systems and outsourcing bookkeeping is well worth it in terms of their returns. That’s because the ability to address pricing issues before they strangle your business is priceless.