If you’re looking for some great business finance top tips for your business in 2024, then read on…..
In most cases your real expertise lies at the heart of your business – making stuff, designing things, training people, selling goods, providing services. After all, isn’t that what you’re really good at and why you started your business in the first place?
Yet you run your business for profit as well. So, you probably want:
In my upcoming blog Small Business and Finance – an uneasy relationship? I will be reviewing the the big problem many small business owners have with their finances.
Even if you are paying an accountant or bookkeeper you probably still don’t know exactly what you need to do to improve their finances. The one consistent message that I’ve been receiving from new business clients recently is that most don’t know where to start.
So, they put it off.
Some even bury their heads and hope it all goes away or gets better by itself.
As you are still reading this, then you are not avoiding the potential finance issues in your business and so read on to see how my Business Finances 5 Top Tips can help you to improve your business.
Let’s get started…..
A really common issue I’ve found with business owners that I meet is that their bookkeeping system is not fias good as it could be:
With free versions of cloud-based systems out there and quality branded systems starting from as little as £5 per month, then cost is not a major factor.
Tip 1: Take a good look at your bookkeeping system and aim to improve it or upgrade it in 2024 to one that meets your business finance needs for record keeping, meaningful business decisions and for tax purposes.
P.S. If bookkeeping isn’t your strong point, outsource it to a finance professional who will provide you with independent, guidance and support.
As a Chartered Management Accountant, I’m often surprised by the number of business owners/directors I meet who employ an external accountant (or bookkeeper) and yet still don’t have a good bookkeeping system.
In some recent engagements, I’ve discovered that the business owner operates their own (weak) bookkeeping system. Their accountant then transfers all their data to another system entirely, to produce accounts at the year end. The first time the owner knows how well his/her business has performed is when their accountant tells them 6 – 9 months after the year has ended.
It’s often too late to do anything about it then.
Tip 2: Review the way you work with your accountant and make sure that you’re getting value for money in terms of quality financial support and expertise when you need it.
“Turnover is vanity, profit is sanity and cash is reality”
Nobody knows the definitive origin of the above quote but it’s still as true today. As we all know, profit can’t pay the bills or the wages until it’s actually turned into cash or reaches your bank account.
Cash and profit are affected by many aspects of your business. When was the last time you had a really close look at your business model and asked yourself:
Not all of these questions will be relevant for your business. Indeed, there may be others that occur to you in your own particular circumstances. However you need to ask yourself the right questions about your business.
Tip 3: Step back, identify the top sales/profit/cash issues in your business and take some practical actions to critically manage them. Ideally engage an independent professional who will challenge your assumptions, make suggestions and keep you and your business moving forward.
As an ex-banker, issues in this area of business finance still surprise me when I meet with owners/directors.
If your business borrows money, are you clear about your borrowing terms, interest rate, fees charged or security held?
Banking is a critical element of a small business financial model and so it shouldn’t be ignored.
Business funding is critical. Covid-19 loans did help many organisations to survive. However these loans do need to be paid back and that requires planning and of course cash.
Tip 4: Review your last bank ‘lending facility’ letter (if relevant) and check your arrangements are what you agreed for the borrowing and that you can meet the repayments. If not, speak to your funder as soon as possible.
Like many business owners/directors you can spend too much time ‘in’ your business, and not enough time ‘on’ your business.
This is a difficult one.
Firefighting, getting paid, making sales, dealing with issues are all urgent.
Reviewing your business performance, checking trends, making plans and thinking about future strategy are all important. (Note: Look out for one of my future articles, “Do you really need a Business Plan?” on how to introduce simple business planning to your business).
So, the trade-off is for you to differentiate between business issues that are urgent (and sometimes important) and important (yet rarely urgent).
Few business owners that I meet actually practice this and it’s often linked to other issues detailed previously in this article:
Tip 5: Develop a plan and financial forecasts for at least the next 12 months, setting goals and objectives. Then adopt these forecasts as “targets” to achieve and then track them using Key Performance Indicators (KPIs). Set aside at least one hour every month to review how your business has performed against your targets and take action to enhance the positive results and correct the negative results.
P.S. Ideally, complete your review with an independent professional who will provide you with the challenge to help you make the right decisions.
Running a business is not easy. If it was, then everyone would be doing it!
Make a start with even one of these Business Finances 5 Top Tips now to help you improve your business in 2024. Understand the critical role that strong business finance plays in the success and growth of your business.
Contact Tony for more information on:
Phone me: +44 7828631021 or
Contact me here: https://www.admorbusiness.com/contact-us/
Email me: firstname.lastname@example.org for more details
Admor Business Solutions
Tony is a Member in Practice of the Chartered Institute of Management Accountants, a Premium Adviser with Enterprise NI and a registered Finance Mentor on many council-led small business support programmes