Creating financial systems that work for you and your business is a crucial part of running a successful, sustainable business! For me, I knew it couldn't go at it alone, and I have outsourced a majority of financial management to professionals, which has been an investment that is worth its weight in gold! That being said, here are 5 financial management tips, things that I have personally implemented into my small business, that I have found extremely helpful!! Cheers to doing business better friends! :)
1. Get an Accountant/Bookkeeper!
When I first opened my business, I didn't have a bookkeeper/accountant, mainly because I told myself that I wasn't making enough money for someone to manage it for me! Oh, I wish I could've gone back and told myself to invest in one anyways! A good bookkeeper/accountant is such a smart investment, and as soon as mine started working on my accounts, I quickly raised my prices, changed the way I priced my services, and have since TRIPLED my profits for 2017! Knowledge is power, friends! :) If you want the name of my bookkeeper, shoot me an email!
2. Track Everything/Use Business Banking!
I went to a floral education workshop last year, where the florist that was teaching gave the attendees this advice: track the money you have already been contracted for throughout the year, calculate your expected profit margin, leave a little wiggle room, and then you will know what you have left to take as your profit for each month! :) I now have a very detailed excel spreadsheet that tracks each project I'm currently working on, when payments are coming in, and what percentage of the payments are profit- this is tremendously helpful and helps me plan out my finances for the entire year! Also, using a business banking account will help you track your business expenses, profit, projects, etc., separately from your personal accounts, which is very important!
3. Use an Accounting Software!
Along the same vein of my point above, having a place where each of your business transactions are appropriately categorized helps me see where money is going in and coming out each month, and what my profit is for the week/month/year etc! For me, that place is Quickbooks, and my bookkeeper actually set it up for me and taught me the basics of how to use it! This software automatically generates profit/loss sheets, monthly payouts for employees, and I can track how profitable each job is for me throughout the year, down to a percentage! Pretty crazy, right?!
4. Get a CPA!
Another great person to have in your corner is a CPA. In my business, the CPA I work with handles my federal/state taxes and write-offs, and also helps me work through business-related questions that relate to taxation and long-term financial planning! Finding a great CPA will save you money in the long run on your taxes, so it's definitely worth looking into!
5. Don't Forget About Taxes!
An interesting challenge with running your own creative small business is that you aren't having federal/state taxes taken out of your paycheck each month- but rather, they are due quarterly or yearly. This can be a stressful situation for creatives who have no idea how much money they have made, no idea what is a write-off, and no idea what to set aside each month for taxes. Again, if you have a CPA/Accountant/Bookkeeper, you have a professional working with you throughout the year, so there are no surprises come tax time! Just put aside the appropriate amount each month, (and maybe even a little extra), and you'll be good to go!
If you are a small business owner wanting to sit down over coffee and dive into your business structures, how to increase your profitability, financial planning, pricing, social media marketing, and more, contact me today at firstname.lastname@example.org - I would love to get to know you, give you some action steps to continue to grow your business and cheer you on! :)