3 Things You Should Do As a Small Business Owner for Financial Success
During my tenure in the Business Banking department at a local bank, I had the privilege of working with the Presidents and CEOs, CFOS, and COOs, of some of the best small businesses throughout Columbus, OH. Before I would wrap up the sales call, be it a prospect or current customer, I would ask them to share the most important financial lesson that has yielded them great success. The answer was two fold for me: 1. I would know what banking products and services I could offer that would solve their problem and 2. I was an inspiring small business owner!
How do small business owners position their company for financial success?
1.Work on personal credit– not just your credit score BUT behaviors. how do you handle your personal credit: Do you pay your bills on time? Do you tithe? Do you save or do you spend every penny you have? Healthy personal financial decision making skills will role over to setting your small business up for financial success.
**Side note: Separate personal finances from business finances, do not combine the two! **
2. Have a basic knowledge of the financial strength of your company- do not leave it to your Finance personnel or Accountant alone. Do you know how to reconcile your books- income/expenses or do you leave the person outsource company to do it all? Do you know how much cash you have on hand? What is the net profit of your company? As a small business owner, it is imperative to have some knowledge of the financial health of the company at all times.
3. Plan- have a 3yr, 5yr, and 10yr financial plan in place. Where do you see your business going? Will you need bank financing? Can you get financing? Will your company stay small and local or do you see it expanding to a corporation and perhaps a franchise? Small business owners have to write out everything that you will need in order to achieve your goals, even if you don’t have it today).
Keep in mind, this list is not exhaustive. But as I compiled the responses collected over the years and currently applying to LLQ Financial, I must admit, these steps are proven to set any small business on the right path to financial success!