How to Take Your Business to the Next Level

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The Importance of Financial Statements

Sometimes all a business needs to get to the next level are good financial statements.  A business owner can be surprised at what their financial statements reveal.  Do you know exactly what inventory item you spend the most on?  Do you know what product or service brings you the most revenue?  Your financial statements can teach you what buying patterns need to be changed.  They can teach you what product or service is working best for you and then you can devise a plan to promote it more.  You can learn what aspects of your business you can leverage.

Are you aware of all of your expense items? Did you purchase a service with a revolving payment years ago that you aren’t even aware that you’re still paying for?  You can eliminate what you don’t need and what is no longer working for you.  Financial statements can make you aware of trends on buying patterns.  Are sales always low in January? You can be prepared for the low months but you can also determine a plan to try to increase sales in the routinely low months.

You can’t fix what you don’t know.

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How is Your Business’ Cash Flow?

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Do you have ample cash flow monthly? It can be a tricky question for any business. Without ample cash flow you might not have enough cash on hand to pay expenses as they come due.  You might end up paying unnecessary late fees and miss out on early pay discounts some vendors offer.  Some people believe that simply signing more clients or selling more products will fix their problems.  All too often though, it just masks more serious problems and doesn’t really fix anything.

The key to cash flow is not just having plenty of it, it’s making sure you maximize what you have.  If you have been organized and diligent in your accounting, then you should have access to information that can start this process right away. What are some examples of things that will improve your cash flow?  If you invoice customers, it is important to review your accounts receivable (AR) activity and see what balance you are carrying monthly.  Analyze the account to determine the average time to pay.  If a majority of your customers are slow to pay you can offer an incentive, such as an early pay discount.  This can drastically improve cash flow by improving the reliability of payments.  Knowing what you have and when you are going to have it improves planning.

Another option that I recommend using in conjunction with the above is reviewing your routine expenses.  Check to see if a frequently used vendor can extend your terms. For example, if your payment is due 15 days after invoicing, maybe they can change it to 30.  Or maybe your cash flow increases at a certain part of the month, say the 15th.  If you have a specific day each month a bill is due see if the vendor can change the due date.  For instance, from the 10th to the 18th.  You might be surprised how willing companies such as, insurance and auto loans are willing to do this.  This type of planning takes time and the proper information, but it will help you to smooth out the highs and lows of your cash flow.

Copyright 2018 Christi Rains, President Alpha Omega Consulting & Bookkeeping, LLC – Sensiblebusinessowner.com – Email Christi@AOBookKeeping.com for more information.

Your Next Big Idea Might be Just Around the Corner

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Why Business Owners Need Downtime

Have you ever been working and had a thought and by the time it took you the 5 seconds to get the paper and pin to write down the thought it was gone?  When this happens it is a CLEAR sign to step away and take at least a few minutes of downtime.  Trust me you will be better off for it.

Our minds read and hear so much information every day. It can be hard to sift through it all, let alone remember it.  Time away from the demands of work can give your mind time to rest and rejuvenate. During non-work activities such as, resting, exercising and hobbies your head can have time to clear. One of the ways I take downtime is by taking a morning walk before I start my work day.  It’s during this time that my mind clears and I think of ideas for my business. It could be a new idea for a blog post, how to solve a clients problem or even a great dinner idea for my family.  When I am ready to start my work day, I can start with a clear mind, which usually leads to a productive day.

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Your Next Big Idea Might be Just Around the Corner

Standard

9ecd313dc504d5f26b6e48e5a37c8b34

Why Business Owners Need Downtime

Have you ever been working and had a thought and by the time it took you the 5 seconds to get the paper and pin to write down the thought it was gone?  When this happens it is a CLEAR sign to step away and take at least a few minutes of downtime.  Trust me you will be better off for it.

Our minds read and hear so much information every day. It can be hard to sift through it all, let alone remember it.  Time away from the demands of work can give your mind time to rest and rejuvenate. During non-work activities such as, resting, exercising and hobbies your head can have time to clear. One of the ways I take downtime is by taking a morning walk before I start my work day.  It’s during this time that my mind clears and I think of ideas for my business. It could be a new idea for a blog post, how to solve a clients problem or even a great dinner idea for my family.  When I am ready to start my work day, I can start with a clear mind, which usually leads to a productive day.

Continue reading