Increase Your Odds to Stay in Business (Part 2 of 4)

In Part 1, we talked about the odds being stacked against business owners and how most failures come down to poor financial management, not bad ideas. The good news is, those odds aren’t fixed. Just like in Vegas, you can study the game and improve your chances. In this next part, we’ll dig into what you can actually do to increase your odds of survival and build a stronger business.

So, to the point, what can I do to improve my odds?   

• Know your numbers   

• Collect the right information 

• Learn to understand what those numbers are telling you.  

• Learn how to control and change those numbers.

We will tell you how to do this.   

There are 16 elements that we have found that will give a small business a complete financial system; most companies have only two of these 16.   Commonly, the entrepreneur collects financial data in a traditional way for one purpose only:  to file the necessary tax information that will keep them out of jail.  This is called “tax accounting.”  In order to report those taxes, you need to gather the information and that is a process called “bookkeeping.”  To make matters worse, most bookkeepers have their days interrupted with 20 other things they are responsible for.  This makes for mistakes.  

Our advice: 

• Section off a number of hours at predetermined times when all the bookkeeper will do is work quietly and uninterrupted on the bookkeeping.   

• Get them training. Not just on QuickBooks or Peachtree, training on bookkeeping.   

Bookkeepers, who are really “bookkeepers,” can and do get certified.  This is a skill that you trust the life of your company to.  Most owners wouldn’t hire people with little or no experience in any other facet of their business, so why do it in the heart of your business?

Most business owners don’t realize how much money slips through the cracks simply because their financial foundation isn’t solid. The truth is, your books aren’t just about taxes — they’re about survival. When you understand your numbers, you can see problems coming before they hit.

In Part 3, we’ll start breaking down the 16 key elements that make up a complete financial system and show you how to start implementing them in your own business. The goal isn’t to turn you into an accountant — it’s to give you control. Because once you understand your numbers, you don’t have to rely on luck anymore.