Understanding your business finances
Financial reports and accounting functions are not the 'dark arts' that many business owners, leaders and entrepreneurs often consider them to be. Rather, they are tools to help you better understand your business, where it’s been and where it’s headed.
Over 800,000 new businesses were registered in the UK in 2021. Around 1/4 of these will fail in their first year, mostly due to bad planning and a lack of financial acumen needed to run a business.
The cause of many business failures can be identified, quantified, and rectified with a firm grasp of financial concepts and the application of a few simple tools. Most most business owners I work with who are successful have spent time trying to understand their own businesses’ financial position and have strong financial KPIs in place.
Do you only speak to your accountant once a year? Do you feel as if they only ever send you a tax bill and not a lot else?
If that sounds familiar and you purely speak to your accountant to receive your tax bill close to the deadline then you’re doing it wrong. Accountants should be key partners in your business, working with you regularly to look not only at your past figures but helping plan your future too.
It may be that you simply approached an accountant, had a small budget or just asked them to prepare and file your taxes. Whilst that is a key part of accounting that is the bare minimum and chances are your accountant really wants to help you with even more than this.
Stop saying ‘Im not a numbers person’
Most business owners I work with are the ‘ideas’ person, not the finance person. The fact of the matter is, to be successful you need to be both. This doesn’t mean being the best at excel spreadsheets or filing your own tax return but it does mean having a grasp on your figures.
It might be that the tools you have in place are simply just not suitable for you. Your accountant is supposed to make things easier for you and work with you to help you understand your figures but the responsibility is also on you to reach out and ask for help when you need it.
“Beware of little expenses. A small leak will sink a great ship.”
As well as helping you remove yourself from the business I can also help coach you with the financial side of things too. I’ll work with you to understand your numbers, get a decent plan and budget in place moving forward to help reach (or set!) your financial results you’re hoping for.
