Knowing THIS Will Keep You in Business
Episode 682: Show Notes
As a company, our mission is to help women create more financial freedom for themselves, which is why financial literacy is a foundational part of what we teach. And while we know it may be intimidating, taking action will give you fresh insight into your company, while also allowing you to make better decisions, and ultimately, save you money!
From knowing your books to mastering your cash flow, it all starts with information. Understanding your numbers is the foundation. And the only way to be free to run your business effectively is by understanding how these all work together. Tune in today to learn how to get your company’s finances under control and empower yourself with the information that's going to help you build a truly sustainable business!
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Finding Financial Literacy
We know that dealing with the financial side of your business can be scary. And even though you might be able to get by for a while without paying close attention to it, once you hit a certain size — and want to pursue more growth — instituting a proper financial system becomes essential. When we initially created the Incubator, the first step that we took was to build a calculator that would help you understand your numbers, because we know how overwhelming gaining financial literacy for your business can feel.
Cash Flow and Getting To Know Your Books
An essential part of gaining control of your business’s finances is getting your books in order. This is because your books are your base. They determine how much you get paid, what you owe in taxes, whether you’re in debt or thriving, and ultimately, whether you’re in business!
One thing that we’ve noticed is that people tend to get distracted by other parts of their business that don’t have the same impact on the company’s financial well-being as having well-kept books. Many business owners become wrapped up in what they’ve sold or the size of their contracts. And while these things are undeniably important (and probably more sexy and fun than focusing on your books!) they shouldn’t be the indicators you use to understand your finances or the state of your cash flow.
Tweak and Repeat
We’ve talked a lot about our strategy of tweak and repeat, where we assess past performance and tweak it to be more optimal. The only way to do this, though, is if you have the information. An important thing to bear in mind is that often when we refer back to things after a lot of time has passed, we tend to gravitate toward the emotional side of things instead of focusing on the facts. This is why it’s so important to have a debrief session after you do a launch or try out a new strategy. That way you can record the feedback information while it’s fresh and access it the next time you need to organize a launch, or institute a new strategy, and refine your approach based on fact, rather than your subjective memory.
Making Sure You Get Paid
Too many business owners make projections based on the assumption that they’ll get paid for all their sales. Which, unfortunately, is never the case. This is why recording sales information is critical. You need to stay informed of what money is coming in, as well as who owes you, who has paid you, who is going to pay you, and who is NOT going to pay you. It’s essential that you have systems in place to deal with all these scenarios, because, at the end of the day, it’s your responsibility to come up with a plan for how you're going to collect on overdue payments, even if you put together a team to do so on your behalf.
Analytics Dashboard
When it comes to analytics, there are certain numbers in your business that you don’t need to track or audit manually. This is because there are tools that will give you access to historical information automatically. Facebook Analytics is particularly thorough and is a great resource for tracking how your online ads are performing. You can also use a tool like Stripe to keep track of which payments went through successfully, and which didn’t. These are just a few of the many tools you can use to keep track of your books AND your cash flow without getting mired in aimlessly tracking data that you don’t need. Ask yourself what data you need to track to take action and then set up your systems accordingly!
Quote This
As a company with a mission that's literally about women creating more financial freedom for themselves, financial literacy is the foundation.
Highlights
Finding Financial Literacy [0:10:23]
Cash Flow and Getting To Know Your Books [0:15:37]
Tweak and Repeat [0:20:54]
Making Sure You Get Paid [0:28:14]
Analytics Dashboard [0:33:07]
Today’s Guest:
Abagail & Emylee
The Strategy Hour Podcast
We help overwhelmed and creative entrepreneurs break down their Oprah-sized dreams to create a functioning command center to tame the chaos of their business. Basically, we think you’re totally bomb diggity, we’re about to uplevel the shiz out of your business.
Key Topics:
Financial Literacy, Accounting, Bookkeeping, Cash Flow, Payments, Clients
