Track Your Cash

Those of us who decide to journey into the world of business as owners of our own ventures do so for many and varied reasons.  I began life as a freelancer and contractor and my primary motivation has always been the opportunity to be in charge of my own working hours and the desire to be able to select the types of projects I work on.  Even though I work very closely with Kylie within the Australian Academy of Wedding and Event Planning and the Wedding Boot Camp I do so as my own ‘boss’ (something that Kylie is overwhelmingly supportive of) and I will soon branch out and launch my own Wedding and Event Planning business (again something I will do with Kylie’s full support).
However at the heart of why any of us works is to earn money.  Earning money as the owner of your own business is very different from being an employee.  If you are an employee within an Events business (or any business) it is likely that there is a finance department (or person depending on the size of the business) who takes care of the recording, reporting and disbursing of money.  When you are self employed, you need to be on top of this yourself.  If your business is large enough you may have someone who works on the finance side of things for you but whether your business is small or large you, yourself will need to have an understanding of what is going on with the money coming in and going out of the business.
Over the coming weeks I will look at some of the things you need to keep in mind when it comes to money and your business.  These blogs will be specifically for those of us who operate small businesses, but do remember that one of the principles of business is to start out as you mean to finish.  By this I mean that the attitudes, policies and procedures you put in place when your business is small, should be as efficient and organised as they would be for a much larger enterprise.  That way, your systems grow with you, rather than having to be completely changed every time you reach a new milestone.
With this in mind I think the most important financial tip for anyone in business is to adopt routines and procedures that assist you in having a very clear understanding of your finances; what comes in and what goes out.  If you can’t do this for yourself you must seek the help of an expert such as an Accountant.  In fact I recommend visiting an Accountant early on in the planning stages of your business and re-visiting them at least yearly for a ‘check-up’.  You may do the actual book-keeping yourself, but having that expert advice may be the difference between a successful business and one that has shut its doors in less than 5 years.  Many a business goes under, not because the product or service they offer is not marketable, but because the business and its finances are not managed well.
I once heard Oprah say that she still signs her cheques.  Ok, I find it hard to believe that Oprah still sits at her desk and signs cheques for everything she purchases, but let’s look beyond the statement and consider what she is saying.  I believe that what she meant to say is that she has not handed over the control of her finances to others.  She may employ people to assist her with the management of them, but I can almost guarantee that she knows what is coming in and what is going out and that ultimately she makes all of the decisions regarding her money.
So my number one tip for keeping your business financial is to track your cash.  If you don’t know what you spend your money on, keep a diary for a month and write every item of expenditure down.  This is a great one for both your personal and business life…but I suggest keeping two separate ledgers if you think you need to do this for both areas of your life.  Spending money on your business can be as tempting as buying yourself a new pair of shoes.  That new bookcase for the office, tickets to an interstate seminar and an assistant to help you with your Administration duties, can seem like a great idea and you can always write it off..right?  Well yes, but you must be able to afford the purchase or expense in the first place.  Don’t fall into the trap of spending money on your business because you can claim them as a tax deduction.  This can be a consideration, but at the end of the day you will spend more on these items than you get back and if your business cannot afford them you will soon be out of business.