The other day I was on the phone with a client who has been in business for a while, but just felt like she could be doing things better than she already is. She asked me to write an article on the top habits that I think a business owner should have. Here they are 🙂
- Debt is bad (unless you know how to use it)
- You MUST have a good set of books (and know how to use/read them!)
- Delegate, Delegate, but do NOT Abdicate!
Here are my thoughts on the (3) above:
Debt is bad (unless you know how to use it)
I have seen so many businesses get into debt when they are first starting out. The scary part is that so many of them never make it out from underneath. Debt can be crushing. You think at the time that it is just something to keep you afloat, for a little while, something to help get you through the bad times. Unfortunately it always turns out to be much more than that. Realize that for every dollar you go into debt you have to make twice that to get back out (one dollar to pay back to the debt and one dollar to pay for your current expenses). In my opinion you shouldn’t go into debt, period. If you have to go into debt something is wrong with your business and you should be speaking with your CPA or other financial advisers to determine what is happening and what you can do about it.
You MUST have a good set of books (and know how to use/read them!)
A good set of books means:
- You can accurately tell what you recurring expenses are from your one time expenses
- You can easily tell if you are making money or losing it
- You can see where your CASH is moving (not just your profit!)
- Note: if you don’t know the difference between your CASH and your PROFIT, please call us! We would be happy to help you understand – this is VERY important!
- You would be able to take them to a bank to get a loan (meaning the accounts are cleaned up and what a banker would want to see)
- You have all (3) meals categories (50%; 100%; Travel) – if you don’t have this, please let us help you with your books! This could save you a TON of $ 🙂
- You have proper categories for proper expenses (meaning, not everything is lumped into one category, it is broken down into the various appropriate categories for that type of expense)
Delegate, Delegate, but do NOT Abdicate!
As a business owner your time important, VERY important. My favorite business coach (of whom I truly believe every business should have) is always harping on me (with good right) to do what I am good at, and to do ONLY the $1000/hour jobs, not the $10/hour job of emptying the trash or building the widget. Delegation is super important so that you, the owner, can get out there and sell, or close deals (the $1000/hour jobs!). NOTE: I am saying Delegate, NOT Abdicate! If you stop watching / or at least managing those below you, the ship can veer off into the deepest oceans without you, the Captain, even knowing!
So, the real question is – do you have these things? Do these things? If not, why not, and what are you doing to get here?
Need help? Contact me, Shauna the Tax Goddess with Tax Goddess Business Services®, PC – Scottsdale CPA