Usually, entrepreneurs launch businesses because they want to turn their passion for something into profit. However, to ensure that a great idea translates into a viable business with growth potential, pay careful attention to all matters financial. What follows are a few key principles to keep in mind when managing your business venture and its financial activities:
Maintain oversight – Oversight is critical when it comes to managing your business’ finances, which often intersect with legal issues. Enlisting outside financial and legal professionals often makes sense for small businesses, but don’t leave all decisions to individuals outside your business. Aim to have a working knowledge of each area in order to provide oversight, ask informed questions and make intelligent decisions.
Watch the bottom line – To sustain growth in a challenging economy, business owners need to be well acquainted with their bottom line and how much they are taking home each month. While big businesses need to know what kind of cash flow is being generated for shareholders, a small-business owner should know how much money is accessible. With that information in hand, a business owner then needs to determine how to augment the profitable portions of the business to continually improve operations.
One way to get a better grasp of your business’ financial activity is to deploy an enterprise resource planning software solution. ERP software solutions, such as Microsoft Dynamics, automate and streamline financial, customer relationship, and supply chain processes. A good financial technology solution will act like business bifocals, giving you up-close and far-reaching views of your business’ financial operations and helping you make more informed decisions as you adapt to rapidly changing business demands.
To determine if an ERP solution makes sense for your business, do your research and then sit down with a local IT partner who can talk with you about your business’ needs and help you use this technology to your advantage.
Wear multiple hats, but not at the same time – Small-business owners often can feel like quick change artists, handling multiple aspects of the business at any given time. It’s important to draw distinctions, though, when alternating between operations manager, for instance, and creative director.
In operations, be engaged and prepared to make tough decisions, stick with the facts and be hardnosed if necessary.
However, when considering fresh business concepts or encountering new ideas or products, you should detach and take a few steps back. Keep the creative process unfettered, and don’t let business processes or consequences weigh you down when you’re dreaming up big ideas.
Seasoned entrepreneurs understand that long-term business success goes well beyond having a good idea and some passion to bring it to the marketplace. To really succeed in your business venture, it’s imperative to understand that every nuance of your operations affects your balance sheet.
Endeavor to have a general understanding of all business functions, whether legal, financial, sales or marketing. Doing so will give you the necessary insight to make more informed decisions and might even make your balance sheet look better and better with each passing month.
Jane Dickson is the West Region General Manager for Managed Partners of Microsoft’s Small and Mid-market Solutions and Partners (SMS&P) group. For more free technology tips and other valuable information, visit www.microsoft.com/midsizebusiness.
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