On the 4th day of Business Planning my true love gave to me… FINANCIALS!
Of the 8 facets of a business, we always lead with financials – why? Frankly, when the financial needs of your business are met, everything else falls into place. Your money is your launch to freedom; it gives you the flexibility to make key decisions.
Financials are way more than production goals – units sold and gross revenue generated. This facet includes consideration of where your revenue is coming from, how expenses are being handled, the tracking systems you’re using, and more.
- How regularly do you review your financials? At minimum, be looking at your Profit & Loss statement monthly.
- What are you keeping in reserves? Ideally you might want six months’ worth of operating expenses, and, if you’re at zero today, first work toward one month of reserves. Then you can build up to three, and later six.
- Which expenses are automatically recurring without some sort of periodic review? Identify where you might need to do periodic renegotiation of things like copier leases, phone and internet packages, just to name a couple.
Another consideration with Financials is whether to hire support for your bookkeeping, or to invest in software. These overlap with other facets of the business we’ll discuss in coming days.
Stay TUNED for YOUR Day 5 of Your 12 Days of Business Planning.