The first step to making better business decisions is to understand how money flows through our business

In the world of business financial management, there's a number of crucial tasks that demand your attention as a business owner:

• Deciphering Financial Statements

• Understanding Cash Flow

• Navigating Financial Key Performance Indicators (KPIs)

• Profitable Pricing

For those who aren't accountants, these "arithmetic of business" concepts can indeed appear intimidating.

Yet, an uncomfortable truth remains: a lack of familiarity with financial management fundamentals is often the root cause of substantial pain and confusion for your business.

As a Chartered Accountant and professional Business Coach, I frequently collaborate with clients on three pivotal projects:

1. Avoiding discounts that eat into profits

Numerous entrepreneurs hold the belief that the most effective or simplest strategy to secure business is by trimming the price tag.

However, engaging in a price-driven competition is akin to a perilous descent to the abyss. Unless you possess a crystal-clear understanding of the expenses intertwined with your product or service production, this race can paradoxically lead to financial losses instead of gains.

If you currently find yourself in a scenario where sales are pouring in, profits appear abundant, yet you're grappling with the inability to settle your bills or meet payroll obligations, it's plausible that you've unwittingly stumbled into one of these common cash flow pitfalls.

2. Investing profits outside of the business

Are you channeling your hard-earned profits back into the growth of your business, or do you divert them towards investments outside of the business (e.g. property portfolio)?

3. Having a system for controlling, managing, and reporting business finances

I frequently emphasis that the small business sector often receives subpar service from their accountants.

The realm of financial reporting extends far beyond mere tax compliance obligations. Profoundly understanding the right metrics empowers you to make superior choices. Better choices results in greater growth and profitability sooner, all else being equal.

Most people would not board a flight whereby the pilot openly admitted they were not going to be looking at the cockpit dashboard at any point during the flight. Rightly so.

Yet many business owners continue to pilot their business without a strategic KPI scorecard in place. Seems crazy when put into proper context.

In my client engagements, a common practice is crafting a strategic KPI scorecard tailored to the unique opportunities and challenges of their business. This invaluable tool aids them in not only evaluating their performance, but also in making timely decisions that can steer the business towards their goals (and away from disasters).

The other dimension of money is “how do I make MORE money?”

Resolving challenges within this dimension predominantly orbits around the spheres of sales and marketing.

Within this realm, there are three pivotal steps to consider:

4. Developing a step-by-step, tactical marketing plan

Our primary aim in embarking on this project is to substantially augment the client base you cater to, bolster your revenues, and elevate your profits—without siphoning away all your energy from your daily business operations.

To achieve this, a well-structured blueprint, focusing typically on just 1-4 marketing tactics at any one time, is imperative.

5. Taking a professionals approach to improving your sales skills

As articulated by one of my valued clients: "I had a knack for getting people into meetings, but I found myself stumbling when it came to sealing the deal."

If your ambition is to improve your business's financial position, upskilling in the art and science of selling is an invaluable skill that deserves your dedicated attention.

6. Targeting the right ideal client persona(s)

This aspect is closely tied to the issue of those "profit-draining discounts" I highlighted earlier.

In the realm of marketing, a paramount objective is to devise a strategy that positions your products or services as distinctive and, ideally, superior to what your competitors offer.

This strategic maneuver enables you to set yourself and your company apart from the competition, thereby affording you the leverage to maintain pricing structures that ensure profitability.

Centering your sales and marketing efforts around the needs of just 1 to 3 ideal client personas at any one time usually makes the most sense here.

Money challenges can be fixed!

Business hurdles tied to finances can be profoundly disheartening and leaving you wondering:

"Why have our relentless efforts yielded so little?"

At times, they can even evoke fear, triggering the worrisome thought:

"Are we on the verge of failing to meet our payroll this week?"

That said, its heartening to know that that these monetary challenges aren't insurmountable. Solutions are abound. There is always a lever to pull.

I've had the privilege of guiding numerous clients in difficult situations swiftly transforming their financial circumstances. This transformation often unfolds through a more profound comprehension of financial cash flows, strategic pricing adjustments, and enhancements in sales and marketing tactics.

Should you desire assistance in navigating the financial challenges within your business, I extend a warm invitation to reserve a 15-minute slot on my calendar for a confidential discussion about coaching.

This call is your first step toward permanently eliminating cash flow woes from your business.