Guest Blog Post Author, Danielle Hayden, Kickstart Accounting, Inc.
Close your eyes and imagine a time where it is the end of the month and your bookkeeping is complete, accounts reconciled and you pull your reports and you actually enjoy the process of reviewing your numbers and you are excited to see how well your business is doing. This scenario feels so out of reach for so many business owners and it doesn’t have to be this way.
This year I worked with a client who was a very successful wellness coach, her business was scaling by leaps and bounds this year but she didn’t understand why she didn’t have enough cash to pay all of her contractors and bills every month. Jenna hid from her accounting because it was confusing to her and she didn’t have time to learn a new skill. After several months of the same circle of confusion Jenna reached out to us for help. After 3 months Jenna has been able to confidently make more strategic spending decisions so that she can decrease spending and increase her profits (this also means Jenna is taking home a bigger paycheck). Now I promise you this is not magic.
How can you use these same strategies that we taught Jenna in your business?
- Set revenue goals
- Determine your financial goal for this year?
For example will you be increasing advertising costs in an effort to increase your revenue or will you be decreasing expenses in order to maximize your profitability.
- Make business decisions with your financial data
- Does your revenue support the initiatives that you have planned next month?
- Review your sales by asking yourself
- What percent did your revenue growth year over year?
- What product or service has the highest sales?
- What product or service has the highest profit or lowest cost of goods sold?
- Review your expenses
- What percent did your expenses grow year over year? Why?
- What expenses are consistent month over month?
- Are your expenses growing faster than your revenue? What changes can you make to prevent this from continuing?
Use these questions as a guide to review your financials this month and every month.
It’s time to get to know your numbers so you can use that information to grow your business.
If you need additional support in analyzing your financials and creating profits in your business you can find additional resources here: www.profitplannerbookkeeping.com