The most important aspect of keeping your business afloat is how you manage your finances. However, not every startup and small business out there can afford to make the leap of hiring a CFO.
In this masterclass episode of One Next Step, Tricia and I dig into the question: While you’re still building your business, what tools are essential to make sure you keep your finances in order to scale your company?
Here are some takeaways I shared:
1. Review your financials monthly.
Not every other month. Not quarterly. Monthly!
You have to always be on top of your financial situation and know what’s going on so you can see trends and adjust quickly if needed.
I’m a major fan of spreadsheets and use Google Workspace and Google Sheets specifically.
Having a spreadsheet with your monthly intake and budget will help you succeed. You should be reviewing your financials monthly so that you can trend and follow where your business is going when you put in your actuals.
Your bookkeeper or CPA can prepare the budget and run the numbers, but you need to be involved and making the decisions.
2. Don't use a tool just because it's "cool" or another competitor is using it.
Make sure any software or a financial tool you purchase is right for you at the moment.
You don’t need all the bells and whistles, especially when starting out. You need something simple that will get the job done.
Expensify and Bill.com are both great, user-friendly tools for you to invest in. I recommend getting specific within those apps so that you have a clear idea of what is going on in your business.
3. Never be your own bookkeeper.
And don’t hire a family member either.
Bring on a professional who you can trust with your numbers — someone who will get the job done and allow you to make the decisions.
A bookkeeper will start helping you by giving you different insight into your finances. They will identify trends, and the insight to those trends will take you from a small business to a medium-sized business because that’s when you will be able to do the forecasting it takes to know where to put your time and money.