Are you in business and/or an investor and feel like you are not getting anywhere? Or worse still, you don’t actually know if you are making progress financially?
Then you need to take control – and you need to do it quickly!
Some easy and important things you can do to work out if you are heading in the right direction (and minimise your risk) include:
- Set yourself a personal expenses budget (and preferably stick to it!) to be withdrawn from your business. This fact alone is one of the major reasons businesses experience cash flow problems – because the owners use the business bank account as a private slush fund.
- Prepare a cash flow budget for your business which is continuously 12 months in advance. This will enable you to forecast when money can or cannot be taken from the business for loan repayments, tax payments, equipment purchases or private drawings. This is especially important if your income is seasonal;
- Legally minimise your tax obligations by ensuring you undertake a tax review prior to the end of the financial year. By doing this you will not receive any unpleasant surprises when you lodge your returns and you can budget for any tax you have to pay;
- Insure your most valuable assets in the event of a disaster – this includes physical assets, public liability and may also include business continuation insurance (we have seen first-hand the value of having business continuation insurance in place);
- Regularly prepare a simplified version of a “Net Worth Position” which measures your business and personal assets and liabilities. If you do this every month you will easily and quickly see whether your business and investments are heading in the right direction;
- Ensure you keep backups of your business records (financial & data bases) off site and back this information each week. Could your business survive a disaster (computer failure, fire, premises being destroyed);
These are only 6 ideas – there are many, many more. However, the important thing is you get this type of discipline in place.
Running your own business is hard work. If it wasn’t – everyone would be doing it.
Get back in control – talk to the team at Green Taylor Partners to see how you can make things easier for yourself.