✦ It’s easy to want to dive head first into a new year with big, bold plans to turbo charge your growth. New year, new me, right? Let’s take this business all the way to the next level!
*Ahem* Not wanting to be the proverbial pooper at the party, but I would first ask you to cast your mind back over the last year or so.
It won’t be a far throw to recall times when the same proverbial hit the fan:
Maybe you became ill at the worst possible time (is there ever a good time with no sickies for business owners?)
An unexpected curve ball came out of left of field
Massive fluctuations in staff probably had you scrambling more often than you’d like
Long story short: life happens. And it’s at times like this you wish you had better organisation inside your organisation
So in preparation for crafting your next vision board, I would urge you to first reflect on the unfolded laundry lying around inside your business.
And the biggest pile is often your financial data.
I know, I know. That sounds much less fun than planning your next product launch. Or hitting your next revenue milestone. But it’s not only the proper data organisation, but the clarity that comes from it, that will give you that strong foundation your next bright idea can be built upon.
And, when the unexpected happens, your knowledge and confidence will be at the ready.
Still not convinced? I want to share three scenarios with you I’ve seen in my time from people I’ve worked with who neglected to stay personally engaged with their financial data… and then the reality check came a knocking.
‘None Of This Adds Up’
A client who had recently separated from their partner had a successful side hustle that needed to quickly become their sole source of income. Their Xero had long shown losses that didn’t actually exist, which they were aware of. These errors had always been addressed by their accountant when it came time to submit reports to the ATO. HOWEVER, those corrections had never been explained and applied back ‘up stream’ to the client’s records.
(Don’t even get me started on how angry this makes me - accountants, your clients need accurate balance sheets. How else will they be able to check anything?).
In the process of optimising their side hustle for self reliance, they needed to approach the bank for a loan. Except, their records were a mess. Their business looked like a failure (which it wasn’t).
And the bills were stacking up. Fast
Thankfully, the client found their way to me and we were able to set their records straight for the benefit of securing the funds required. But my golly gosh (*use your imagination for what I ACTUALLY mean*) imagine how much lower the stress levels would have been if the financial data was tidy, accurate and ready to go immediately?
‘I had no idea I was being manipulated’
Another client came to me searching for answers, with financial records that also didn’t make sense. In the process of digging deep, investigating and reviewing recent decisions made, it came to light that the business had been subtly hijacked, by a new administrative assistant, who had then become a romantic partner.
A firm understanding of the flow of money in and out of the business - and how it is categorised, in a way that you can easily interpret - can save you from being blind sided by your own support people. As a high functioning, creative entrepreneur, it’s very easy for those with ulterior motives to work their way into your confidence. From there, they affect your decision making, erode your certainty of your financial know-how, and pull your business off-track.
At the very least, well intentioned but undertrained or inept staff can drop the ball. At worst, your entire business can be derailed by another’s self-interest.
Don’t get caught in the blind delegation trap because your numbers seem too hard to get your head around (or you think they are someone else’s job). Trust me: getting screwed over is worse.
All Bets Are Off When A Loved One Is Sick
This one is much closer to home - this is MY story.
In 1995 my eldest child was diagnosed with leukaemia at a very young age. I can’t begin to explain how it feels to have your world flipped on its head like that. Whilst I wasn’t a business owner at this point, my husband was, and so began the arduous marathon of juggling a gruelling two year treatment protocol.
WHILE trying to raise a child with as ‘normal’ a life as possible.
WHILE staying on my game at my own job.
WHILE taking turns flying our busy 2-year-old boy to Sydney for regular chemotherapy.
WHILE often having him admitted to hospital for a week of IV antibiotics.
WHILE keeping a marriage together and having our next child.
WHILE running a business.
Talk about financial anxiety - I really do get it! Suffice to say, life can suddenly make your plates extraordinarily full at times. What doesn’t break you does indeed make you stronger, but having messy business finances in times like these is an added pressure easily avoided.
That is, when your house is in order.
The big takeaway: don’t wait
Don’t wait until a relationship breaks down or a loved one urgently needs you. Don’t wait until the wheels have fallen off your business because you never fully understood what makes them turn.
The ideal scenario is that your data is organised to such a high level that, at any time, you can glance at your reports and immediately know the state of your own affairs.
WITHOUT needing an appointment with your accountant, or for your bookkeeper to run a report.
Ready to jump into a Google Search? Here’s some go-to terms for you:
Profit & Loss Statement
Balance Sheet
Chart of Accounts
Get to know what these terms mean, and more importantly, what they mean in the context of your own business. Find them, make them your own and become fluent in them.
This can seem daunting at first - don’t get deterred by the jargon. If you’re not ready to fly solo, you can always book a session with me. I can give you a guided tour of your business finances, explain the lingo in real world terms and help you connect the dots inside your own numbers.
Just head over to my booking page Free Strategy Session with Liz to get started.
Speaking from experience: you’ll be surprised at just how much you actually know.
Disclaimer: These are yuck and boring but unfortunately a legal requirement for professionals in my industry. So just a reminder, the information contained here is general in nature and you should seek financial and business advice tailored to your own personal circumstances. Which, by no small coincidence, I can help you out with. Head over to my website and book a free 30 minute chat with me: https://betterbusinessdecisions.com.au/
Contact:
Liz Jarvis BEc CA
Better Business Decisions
Phone: D 02 6553 0274 M 0409 570 522 Email: liz@betterbusinessdecisions.com.au
Youtube Channel: https://www.youtube.com/channel/UCd_7znD53DbzVfmLoFPVZWQ
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