New Year, New Finances – How To Keep Your Small Business Finances In Control
By Ken LaRoe, Chairman and CEO of First GREEN Bank
January is here and hopefully you have already decided where you are going to take your business in 2014. As a serial entrepreneur, I’ve learned firsthand the financial struggles of small businesses. Instead of letting your businesses’ finances cloud your day-to-day, make the steps to take control this year: revisit, rethink and refuel.
Revisit last year’s financial numbers.
A great way to improve the future is by revisiting the past. Now that 2013 has come and gone and you have completed your year-end financial statements, it is the ideal time to revisit last year’s performance. Look critically at the income and expenses.
Determine if the income is comparable to industry standards.
Understand any deviation, positive or negative. Increase sales of your high margin products or services. Eliminate any expense that is not strategic. Spare nothing in your analysis.
Rethink your role.
Sometimes it is best to save yourself the time, money and headache by calling in a pro for financial help. Certified Public Accountants (CPAs) are great allies for small businesses, providing intimate knowledge of financials and business operations. Although it may be more tempting to save yourself the buck and do it yourself, a good CPA is always more profitable in the end – just think how many additional tax deductions they are aware of and their ability to keep you penalty-free.
An additional resource to seek help from when addressing your finances is the local community banker. Oftentimes, community bankers provide much more than just financial services. They have knowledge and contacts to help take your business to the next level.
The beginning of the year is the time to seek financial advice from experienced advisors – allowing yourself plenty of time to not only discuss your financials, but time to act on their suggestions. Plan and budget for the year. Remember, a goal without a plan is nothing but a dream.
Capitalization is the single most important issue a small business faces. You simply cannot grow or maximize your income without adequate capital. The recent Great Recession made it doubly difficult to receive bank funding or even private funding, but fortunately now these sources are increasing. Using the figures calculated in your budget, ensure that you have adequate capitalization for the next year and projected out to five years.
These tasks are not easy and no doubt they will be time consuming, but by taking these steps in the beginning of the year, you will be in control of your small business finances.
Ken LaRoe is the founder, Chairman & CEO of First GREEN Bank. Headquartered in Mount Dora, Fla., First GREEN Bank is a community bank that promotes positive environmental and social responsibility by offering lower interest rates for commercial projects that meet green building certification defined by the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) standards. The bank also offers personal and commercial banking services such as loans, mortgages, checking and savings, CDs, IRAs and money markets.
This is an article contributed to Young Upstarts and published or republished here with permission. All rights of this work belong to the authors named in the article above.