How do you start taking control of your finances when you've just been winging it all this time?
I've talked to a lot of business owners who don't have a good grasp of their numbers and
have been just coasting along resulting in some serious financial issues. So
if you’re one of those who’s just been paying the bills and taking a little home here and
there when you need to, or taking out debt to stay afloat, or just feel lost financially,
here's the 5 basic steps I recommend to start taking control of your business finances.
Hey y’all! Savanna Bell here with My Massage World where I give business advice and strategies for
the real world. Let’s just dive right into these 5 steps to start getting control of your finances…
#1 Assess the damage First and foremost, you
have to understand the exact position that you’re in so that you can even begin to know how to move
forward out of the mess. Update all your financial statements; your revenue, debts, profits,
expenses, etc. Don't worry about what's "good" or "bad" about any of it right now, just get the
real numbers in front of you. It's this data that you have to have in order to start moving forward.
#2 Determine necessary expenses Not always, but oftentimes, there
are improvements to be made to your expenses. Where can you make cuts? How can you ensure
each expense is an efficient use of your money? So I want you to make 3 lists...
One list of absolute necessities, like the bare bones minimum to keep the lights
on and the doors of the business open. One list of the stuff that simply make
things nicer or more comfortable. And the other list for the
definitely don't need but want to have stuff. The first is the only one to worry about right
now. The other two can be cancelled and added back in when you're more financially stable.
When you’ve dug yourself into a hole, you have to swallow your pride, make some serious concessions,
and stick to the bare minimum until you’re out of that hole. It may not be comfortable,
and you may not particularly want to do it, but you’ll dig yourself out of that
hole a lot faster if you’re willing to make some sacrifices in this first part.
#3 Take Stock of Revenue What are you bringing in versus
what do you need to bring in? This is where you want to recognize the amount of money you want to
make and the savings you want to build, then work that into your revenue. What are you sitting at
right now and what kind of changes need to be made to increase that revenue to give you that number.
#4 Create realistic goals and timeline Understand that your business isn’t going
to suddenly go from in debt and struggling to stay afloat to wildly successful overnight.
It’s going to take time. So be realistic when setting goals and what you can expect
to achieve in a certain amount of time. For those who are hanging on but not doing great,
it may only take a few months of really busting butt to get things under control and be well
on their way to a solid financial foundation. For those who are really in a hole, this might
take much longer. Give yourself some grace here and expect everything to take longer than you’d
like. It’s better to be pleasantly surprised when things move faster than you plan for,
than to be disappointed constantly when it feels impossible.
And lastly, #5 Create a plan of action
Knowing these numbers, coming up with goals, that’s all wonderful. But
it’s only the starting point. It’s the clear path, a solid plan of action that you then
IMPLEMENT that will make this work. So get as detailed as possible and start piecing together
EXACTLY what you need to do to make this happen. What cuts will you have to make? What pricing
structure will you need and how will you implement it? What marketing efforts will you need to carry
out? All the things. Put it down in a list to check off as you go. Each step is progress.
It’s ok if you’ve made mistakes, gotten in over your head, or didn’t do all the things
you should have. Wallowing in it and staying in that place isn’t going to help though.
Do the hard thing and assess it, figure out what’s going on now and determine where you
want and need to be, then start putting the pieces into place to get yourself there. You got this!
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