“Be your own boss,” they say.
“It’ll be great,” they say.
“You can work less and make more money,” they say.
I want to know who are these people that keep saying this. Now don’t get me wrong; being a business owner is rewarding. I love being able to look back at what we’ve accomplished so far, and I get excited at the possibilities for the future.
No matter where you are in your business, make sure you celebrate those small victories –
- Gaining your first client
- Having your first 5-figure month
- Reaching 6-figures in sales
Heck, celebrate documenting a process! Looking back, I wish we started sooner. It makes the onboarding of employees a lot easier!
But, being a business owner is also a lot harder and scarier than what “they” say. You have:
- Vendors to pay
- Maybe employees to pay
- TAXES to pay
Let alone making sure you have money to take home.
If you are like most Small Business Owners, you went into business because you are great at what you do – whether it be IT, Accounting, Logistics, etc. You are that Tech/Bookkeeper/Widget maker turned business owner.
But There’s A Lot More To Running A Business
What we easily overlook is all the other aspects of being a business owner – insurance, marketing, sales, accounting, employees. It’s enough to make your head spin! And when we started our business, no one gave us a manual on how to manage these other aspects. If you’re anything like me, we flew by the seat of our pants and figured things out as they came up.
Now maybe I’m biased toward accounting, but I think accounting plays a crucial part in all areas of business. We need to know how much it costs to produce our products (and, more importantly, what our margin is), marketing costs, or even how a specific product line is performing.
But a majority of business owners don’t have an accounting degree, and looking at financial statements is like trying to read a foreign language.
So how do we make heads or tails out of the financial statements? And how do the financial statements tie into marketing, sales, insurance, and employees? Honestly, those statements make sense to only a few people. Let me tell you a secret, even with having an accounting degree and 20 years experience in the commercial space; some statements don’t make sense to me either. I’m looking at you Statement of Cashflows….
So when we don’t feel comfortable using the financial statements to make business decisions, what do we do? We look at our bank account! That’s pretty clear – either you have money, or you don’t (except for checks that have not cleared yet).
So How Do We Gain Financial Clarity?
Instead of trying to change our behaviors and learn accounting, why don’t we work to LEVERAGE our natural behaviors? With technology, we all pretty much walk around with access to our bank accounts in our pocket. But how many business owners walk around with access to their accounting system (Quickbooks, Xero, etc.)? Not many! Besides, who would want to?
So how do we leverage this? We utilize a proven cash flow management system that not only brings incredible financial clarity but also peace of mind. In this system, we leverage multiple bank accounts (similar to the envelopes that we’ve used, our parents and grandparents have used) with different jobs or purposes. Each dollar that comes in is assigned a role and allocated accordingly. As a result, you can quickly see how much you have available for bills, for YOUR pay, TAXES, and, most importantly, for PROFIT!
So remember, celebrate the wins – big or small – and leverage your natural behaviors to keep an eye on your finances.