Many business owners get burned out, putting endless time, energy, and resources into their business, but barely drawing a profit for themselves.
That’s not to say the business doesn’t make a profit, but it’s common to simply want to reinvest that profit back into the business, believing that such is necessary to sustain steady growth.
In this blog post, I discuss why it’s actually just as important that you withdraw a healthy profit from your business. Your business should serve you just as...
There’s more to bookkeeping than tracking income and expenses.
Things can get a bit complex, especially when dealing with accrual-based methods, which involve recognizing expenses and revenues after, or even before, cash actually changes hands.
Sometimes you want to prepay for an expense up to 12 months in advance, maybe to lock in a discount, or simply because that’s what the vendor requires.
In accounting this is called, appropriately, a prepaid expense, and it requires special handling.
In software development there is a principle called “YAGNI” which stands for “you aren't gonna need it.” It basically means that you should only add a feature when it's absolutely required. You shouldn't do something because it seems cool or it might be needed later, because chances are it won't be needed after all.
The same applies in business. There are a million and one things we think would really help our business — and sales people for each of those things that will tell us why we...
Starting a business is a large undertaking. There are so many moving parts — so many things to take into consideration.
In the midst of all this, you're almost certainly going to make a mistake here and there.
But that's OK. it's not the mistake itself that will usually impact the business in the long-run: it's what you do about that mistake.
It's about whether you take it in stride, or allow it to affect your confidence and belief in your own success. Those who see mistakes as just part of...
What would you say is the most important expense in your business?
Is it the rent, to make sure you have an office to carry out your business?
Is it your payroll, to make sure your employees keep coming back?
Maybe it's the materials that let you create your products to be sold?
It's none of these.
Your most important expense is the payments you make to yourself, the owner.
You are the linchpin of the business. Without you, nothing else could happen.
But even beyond that, the business exists...
Cash flow is a part of business that is often ignored. As long as you have profits on paper, and as long as there's cash in the bank, it's easy to think that everything's OK.
And yet it's only by being intimately aware of your business's cash flow that you can answer certain questions, such as whether you can afford an additional expense, or to bring on another employee — or even if you can just pay yourself more.
A couple weeks ago I did a Facebook Live discussing the importance of knowing...
When you're planning for some new venture in your business — whether it's bringing on a new employee, or taking on some new expense — I 100% believe it's important to make sure there's room for it in the budget, first.
But sometimes, an idea just strikes out of nowhere — an idea that you're so certain will work out, you simply want to act on it right away without worrying about the details.
I think there has to be a balance between planning and inspiration. Some people are 100% on the...
If sales dried up, how long would your business be able to operate?
Do you ever have times when a major expense could wipe out your cash reserves?
Businesses are just as prone to living “paycheck-to-paycheck” as individuals can be. And for that reason, building a healthy savings is just as vital.
It’s hard, especially when starting out, because there are so many demands on the business’s cash flow: various expenses, payroll if you have employees, and of course paying yourself.
But I always...
On Monday, I'll be going live to talk about the importance of knowing where your business's cash flow is going.
Whether you're a solopreneur working on your business on the side, or a six-figure business with multiple employees, it's vital to manage your cash flow and know where every dollar is going.
Otherwise, you could be in for an unpleasant surprise when an unexpected tax bill comes around, payroll is larger than usual, or theres an infrequent expense you simply forgot about.
Cash flow is such an important part of any business, and yet many business owners have no idea where all their money is going, or whether there's enough for all short-term and long-term expenses.
As a bookkeeper, I know how vital it is to have a clear view of your cash flow and to be purposeful with every dollar. We know it's important in our personal budgets, but it's just as important for your business as well.
Next Monday I'm hosting a live Facebook event called “Are You In Control of Your...