Updated: Jun 4, 2021
I love seeing these hashtags because they usually follow a dope caption and photo posted by someone who runs their own business. They are proud of how far they’ve come, happy to build a following and looking for the secret sauce to a successful 7-figure business.
Social media today is more important than ever when it comes to growing a business. Your customers have to know how you can help them and where to find you. Marketing efforts are great but what about your back office?
Compliance with local, state and federal laws and regulations. If this is not happening then stop reading right now because nothing beyond this text matters. Just ask any trucking company owner that’s failed a Safety Audit. Or any restaurant owner when the state shows up. Or any entrepreneur operating without a business license. Or any celebrity whose failed to pay taxes. Regardless of your industry, your business must follow the rules set forth in your jurisdictions including county, city, state and federal.
Cash flow. Ok so you’re following rules and paying taxes and graduated to cash flow. Did you know that revenue, income and your cash balance are THREE different numbers? If you don’t know your cash flow or it’s dried up, it’s time for you to get your finances in order. We pride ourselves on not only managing your financials but keeping you informed along the way. We have nearly two decades of accounting expertise from start-ups to multi-billion dollar global organizations.
Financial statements. These collectively represent the story of your business so you should know it! Know the basics of each statement - how do they help end users? End users are the investors or bankers who rely on financials when making lending decisions about your business. The first step in obtaining capital to grow your business typically starts with providing these statements to assess the financial health of your business and include the profit & loss, balance sheet and cash flow statements. At The Winston Accounting Group all service packages include financial statements and a cheat sheet of key performance metrics. Why? So you as a business owner have the information you need to price your offerings, assess your spending and make strategic decisions.
Internal control. Is your business protected in the event of a failed person or process? Business risk is inevitable in the economy. The focus here is on preventing failures that are within your control. When is the last time you stepped back and looked at how your business runs? How safe are you from hackers or data loss? Where is your SOD matrix? When did you last update your policies and procedures? I know this sounds like a lot and small businesses have greater challenges with internal control because of limited financial and human resources. The benefits are important as these are all designed to detect and mitigate fraud. It’s in your best interest to invest here to prevent
Standardized processes. This will take trial and error in figuring out what works for your business. There’s a plethora of softwares and tools to make this easier. Once you’ve established a process, be consistent so that (1) you can train someone else and (2) you eliminate chaos in the business. Keep in mind rule #1 because your operations must operate in accordance with laws and regulations. This is also a cost-savings opportunity. As you document the “what & how” of your business, you can spot things to improve on. For example, automate things that are the same each month to free up time to do other things...like making money!
While this may seem like a lot, these essentials all relate to each other so there’s some synergies. For example, internal control helps define your standardized process. Once you’ve identified control objectives (internal control), you map out how you will achieve those - the “how” is the standardized process. See how that works?
There’s so much more to be cognizant of, but these are high level stats any business owner must be aware of. Complex financial matters should be deferred to your accountant.
What questions do you have about these 5 things? Email me if you're an entrepreneur trying to figure this all out. I understand you have billion dollar ideas but may not understand the business rules to get you there. Having a CPA with the technical know-how to tell the financial story of your business is the starting point. This expertise is valuable to you as you make strategic decisions and set goals.
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The information contained in this post should not be construed as business advice or relied upon to make business decisions. You may schedule a consultation with our CPA firm to discuss your specific business needs. Interested in our client accounting & advisory services? Tell us more about your business.