If you’re about to launch your own business, I’m truly very excited for you! However, I don’t want you to look back and say, “I was so busy getting my business off the ground that I never really looked back at the results.” Here are a few success indicators to keep an eye on from the beginning.
- Are you experiencing growth? What’s the trend: are sales and profits increasing or decreasing?
- Are you making enough profit? This is a comparison question—what are other similar companies experiencing?
- Are you liquid? Can you meet short-term obligations?
- Can you leverage? Can you take advantage of financing to operate and grow?
- Are you effectively managing the assets of the company? This another one that is extremely important to keep top-of-mind.
Habits and must-dos at all times:
- Stay on top of cash flow: The #1 cause of business failure is running out of money. Sounds too simple, but in fact, it’s too easy. Do you know where every dollar is coming from and where it’s going? If you don’t, you need to.
- Check all spending: Be sure you are spending wisely. Some nice-to-have items and services may be just that—nice to have, but better for later, when you’re more established and profitable.
- Operate thin: Keep all of your expenses as low as possible. Is there any way to share and barter—such as with office space or supplies and services?
- Prepare for the worst: If you can still work at a steady job while your new business gets underway, then do it. The key is having reserves on hand in case you are facing the worst.
- Work knowing every minute of your time has monetary value: There’s supposed to be a healthy balance of time spent on the business vs. in the business. Are you using your time wisely?
- Stay focused on customer acquisition and maintenance: What are you doing to find new customers? Can you keep your current ones happy? Can you scale? You can’t be stuck in one position and be profitable. You’ll need to find, maintain and scale.
- Establish financial goals: Set goals, and make sure you are meeting them. For example, setting monthly, weekly or daily revenue goals allows you to stay on track and make the adjustments necessary for constant growth.
As a CPA who helps small businesses succeed, I want to be sure that you’ve established financial indicators that make sense for your business. If you’re looking for help and guidance on tracking your financials as well as setting indicators for healthy growth, my team and I are here to help!
8 Financial Tips for Entrepreneurs Launching a Startup by Jonathan Long