Friday, October 1, 2010

Practical Tips for Entrepreneurs - How to Take Care of Finances While Building a Client Base

It is easy to get bogged down in marketing, production development, and the myriad of tasks that go into generating revenue in a small business. Entrepreneurs need a way to stay on schedule and manage the other activities in their business. Accounting and finance are two areas that business owners cannot afford to let fall behind. Ignore them too long and the results will show up in the bottom line and net worth.

Here are three ways to nurture your finances while you build a client base.

1. Make Consistent Improvements. How you use cash in your business is important. If your goal is to create an enterprise that is self-sustaining, meaning that it can support itself and you, then you can not allow financial mismanagement to rule. Take control by monitoring your revenue and spending. Watching over these areas is not simply for the sake of having updated books or financial reports that you never read.

To find hidden growth opportunities you need to know the story behind your numbers. For example, if you notice changes in gross profit, take a look at each of the factors that influence its total. Ask yourself what is happening to cause the results to change? Is there something that you can do to get better results?

2. Know the Basics. If it has been a while since you took your last accounting course make it a goal to get up to speed with accounting basics. Even if you are going to assign someone else to do the work for you it is good to know how to use accounting terms, principles, and tools.

Financial reports are your company's report cards. The results are the grades that help you determine where you are excelling and where you could use additional help. Being able to spot key indicators is how you will improve your business.

3. Check in Regularly. Be sure that you carve out time to go over financial results with the people who handle your accounting. Pull out your reports and ask questions that will help you make sense of what is going on. Take notes and listen for new insights as they surface. Go back to your stated goals for the period to see how close or off track you are.

Then go a step further and use the advice that you get during each session. Are there additional ways that will make your company more efficient in operations? Did you identify any new insights that can help accelerate growth? Talking with your accountant goes beyond their recording financial transactions. It can help you uncover new ideas, reduce waste and inefficiencies, and find hidden potential for increasing your bottom line.

By : Benita_Tyler

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