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How To Face Your Financial Challenges

I ran my own business for 13 years and as I reflect on the biggest lesson I learned from that time, I wish I learned sooner to share the management responsibilities. When the business relies solely on the owner to make all of the decisions and to take care of the constant issues that come up, the owner (and possibly the team) will soon feel a sense of overwhelm and burn out.


Once I learned that a few different opinions are good for business, I started to welcome advice and insight from others. A good leader will ask for opinions, get the feel of what the team sees could improve and once all information is available, the leader makes the decision on how to move forward. This process leads to a high success rate for the business.


Business leaders can feel isolated when they don’t have someone to talk to about the things that keep them up at night. You can’t usually talk with your employees about these struggles and often your spouse or partner doesn’t really understand how to help either. The stress that comes from this isolation can lead to poor health and feelings of anxiety. Given these struggles, it is easy to see how it doesn’t take much to lose the confidence that you had when you started your business.


Business owners are creative and talented in their area of expertise, but they don’t always know how to successfully run a business. This can be especially true when it comes to the financial side of business. For example, cash is essential to a business and understanding the cash cycle will make your life so much better. And I don’t mean just looking at the available cash in the bank account, which is something that many of us are guilty of doing.


The good news is that when you have the desire to grow a profitable business to make more money for you and your team, you have many resources to improve your growth rate. Most business owners don’t love to sit to analyze financial reports, but they do love to be guided on what those numbers mean and how to move forward in the business based on the financial reports. You can learn how cash flow influences your business without having to be an expert with the data. Working with a financial coach will help you in the following areas:

1. Top line growth – What helps your business increase revenue? How do you generate leads for sales? Do you currently offer the right product mix? What is your average transaction value?

2. Profit margins – Do you know how much money you make on each sale? Sadly, I have seen too many businesses fail because they didn’t actually make money on sales. Revenue could be hitting all the goals, but when revenue is not covering the cost of the product businesses will quickly run into problems.

3. Setting targets – Are you looking at the numbers enough to know if your profit margins are where they should be? Do you measure and review your targets on a regular basis?

4. Cash Flow – Business owners know how delicately they must manage cash to be able to cover payroll, rent and other overhead costs. and sometimes the business can quickly burn through cash reserves. Understanding your cash cycle will alleviate stress and help you build the cash reserves needed to grow your business.

 

It may feel like splurging to hire someone to help you with the analysis of your business, but I have seen business growth soar and cash flow improve when a business owner decides to hire a professional to help them understand their targets and determine the best steps to grow. The other advantage of hiring help in these areas is that you have someone to share the burden of being an entrepreneur. Sometimes that is worth the most because talking through the struggles of business ownership can lead to better and stronger solutions to the obstacles you face each day as a business owner.


Understanding your cash flow cycle means that you know when to expect money to come into your business. You also understand your profit margins, overhead costs and other operating costs that your business needs each cash cycle. You can be successful in setting the right goals so that you move in the best direction for you and your team.


If you are looking for a professional coach to assist you in the areas above, check out the services we offer. Apex Virtual Accounting can provide coaching on the cash flow for your business. In addition to our CFO services, we have both current and upcoming courses that will help you understand more about these topics.


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