Gear up the financial success of your company and follow these three tips to keep your business finances in the black.
Draft a budget.
Do not even think about running a business without a budget. If you do not plan for financial success you should work for someone else that does or hire a CFO. From day one at the firm I had a budget. You need to know what you expect to make, where you plan to spend money and what your profits are going to be. As you grow you’ll need more sophisticated modeling and to learn about ratios and percents to help you be strategic with your decisions and understand how your cash flow will be impacted. When I went to Dartmouth’s Tuck CEO school back in 2016 I was pleasantly surprised when I found I could have taught the finance portion of the course. Knowing finance is key to leading a successful business. If you are a lawyer and plan to be a partner or work with business clients I highly recommend you learn business finance basics or your opinion will not be as valued in making business decisions because you don’t know the fundamentals.
Demand timely financials and regularly review your progress.
We operate with real time accounting and I regularly monitor my financial reports. It’s my role as the CEO. If I’m going to look at where we are to make decisions about the future I need reliable data at my fingertips to make solid decisions. Month old information would not allow me to be as bold and confident in my business judgement. I know what data to pull and how to direct my administrative team on firm finance. If I plan to open a new office I run forecasts and budget accordingly. If I want to pay bonuses or make a large capital expenditure I evaluate the future impact.
Create a culture of profitability.I expect my team to bill their time concurrently as all studies say that is a best practice for reliable data. We value our services and require clients to pay for our services and post retainers. If I’m not getting paid (unless I purposely took the matter on pro bono) I’d rather go to the movies. As a professional I like helping people but our service is our business. One of our beliefs is to under promise and over deliver. Regular monthly billing also keeps clients informed and prevents surprises. In addition it promotes cash flow. When it’s the first of the month we stop drop and roll. Making a profit is not a bad thing. Sometimes in society people act as though being financially successful is something to be ashamed of. If you’ve ever tried to run a business you know the immense hard work and stress it takes to take on the financial risks and that anyone that has made it is to be commended for their success because it is super hard to do. Most businesses fail. There are few true get rich quick stories and if you find one it’s probably a scheme.
Contact our Sioux City, Sioux Falls, or Omaha law firm today to help you ramp up the financial success of your business.