By Erwin Brem (Sarina Russo Entrepreneurs Business Coach)
99% of businesses do the thing they do well, but far too may fail in the money department - record keeping, cashflow, profit, paying the taxes, super and fundamental financial planning. Regardless of where your business is at, get this under control as early as possible, like right now, and business growth is easier.
Here are a few simple starters:
1. Have a financial plan - an outline of what's going to happen, sales, income, expenses, cashflow and projected profit.
2. A separate bank account for everything in and out. Too many businesses confuse this with multiple accounts, and it gets messy.
3. If registered for GST, take 10% of the monthly sales and put it into a separate account. You won't need the 10%, but it's a good habit. Then do your BAS on time.
4. If you're doing the record keeping yourself, get a system like Xero or Quickbooks as soon as possible, and get into a habit of updating it regularly. Micro businesses could get away with a spreadsheet, but a real system is better in the long run. Most small businesses would not need to spend more than an hour a week maximum.
5. If your time is better spent doing the thing you do, get a bookkeeper. There are plenty of options that will probably cost less than you doing it yourself.
6. You'll need an accountant at some point. There job is to guide you, but with a good financial plan, that's a lot easier. You can do your BAS yourself, but your accountant is there to also help minimise taxation and give you advise on how to do that effectively. An accountant should be someone that does more than your yearly tax. They should help in clearly giving you advice on how your business is tracking and long term financial management for the future. If they don’t do that, change.
Controlling the financial aspect of a business has never been easier. Most business bookkeeping software is very cost effective, most connect with a phone app that enables you to do anything on the run, including invoicing if needed. And there's still nothing wrong with manually doing a lot of things as a micro business, if your transaction numbers are low.
If your money matters are under control, it makes the rest of the business much easier, less stressful, and even simple. Get that done, start with a plan, everything in one account, get a system, and get real support. Try it.
Not 100% sure you will be able to create a startup successfully?
We offer accredited small business training that can help turn your business idea into reality. Sarina Russo Entrepreneurs (SRE), in conjunction with The Self-Employment Assistance program (previously New Business Assistance with NEIS), enables Australians to set up and run their own small business. The Self-Employment Assistance is 100% Australian Government funded.
Sarina Russo Entrepreneurs (SRE) supports candidates as they complete BSB40320 Certificate IV in Entrepreneurship and New Business. During this, candidates create a comprehensive business plan and a two-year financial cash forecast. SRE Trainers provide meaningful mentoring for the first twelve months.
Eligible candidates receive the training and support to create a viable business plan, in addition to obtaining a Certificate IV in New Small Business.
For more information, please click here.