You knew finances would be a challenge when you started your business. But hey – you’re a creative right? Where there’s a will there’s a way
So each week you pulled out your Excel Spreadsheet and calculator hoping the numbers magically work together to get you paid.
Sometimes they did. Sometimes they didn’t. Either way – you know if you are going to stay in business, you’ve got to figure this “numbers” thing out.
Don’t feel embarrassed because we’ve ALL been there. Hiring an accountant seems like a painful expense.
No need to get fancy now with outsourcing luckily you have options in the meantime. You can start by Tracking Key Performance Indicators each week. These numbers show you what’s happening in your business so finances aren’t as scary:
Before We Get to the Nitty Gritty…
Full disclosure – I am not an accountant by any means at all. (Wedding planner and right sided brain here!)
I’m pulling all these KPIs from a chat with my own accountant and they might sound overwhelming at first.
But at the very least if you take anything away from tracking numbers it’s this: know your profit and cashflow.
→ Profit is Gross Revenue (the sales coming in your business) minus Cost of Goods (the cost of selling your product or service). That final number will be a profit or loss.
→ Cashflow is knowing how much money in your business you can take out right now. Remember: Cash is king.
Aright, you ready? Grab a pen and paper because we’re about to get nerdy!
KPIs To Follow in Your Business
My accountant is sharing a free Weekly Cash Dashboard you can use when tracking these numbers so make sure to grab it here! By the way she suggests tracking weekly so you can easily notice trends.
Without further ado – here are the metrics you should track each week:
How much cash do you have at the end of the week? Is your cash balance dipping at the end of the month? When you track cash balance you’ll notice how you spend money each week and how to make better future spending decisions.
Credit Card Balance & Availability
Especially in the beginning – you might use a credit card to pay for start up costs. Each week look at your line of credits, and loans.
If you plan on buying that shiny new course but your credit availability is narrow – think again. You’ll need to check whether that’s something urgent and how to pay off that debt if you do buy.
Money Owed to You
I mentioned cash is king right? Well the only way to have money coming in your business is if people pay their invoices.
I give you every single permission to collect the dollars you’re making because you are performing a service, friend. If people have a hard time getting back to you – as awkward as it is – send those invoice reminders.
Either from your bookkeeper or by creating a dummy email account if you don’t want to tarnish client relationships. Seriously – one of my wedding planners suggested this and it was a great idea!
Money You Owe Other People
People tend to forget their credit card dues or upcoming payments. Like that monthly membership you wanted to join that you forgot about. Any money going out over the next four weeks? List it here.
That makes decision making easy. If you don’t have money coming in – you shouldn’t sign up for anything. It’s that simple. That way you don’t become a course hoarder. (A hard but important habit to break!)
Weekly, Monthly, and Annual Sales
So the last piece on his dashboard are sales. Each week, either you complete this or have your bookkeeper send:
- Your Sales Month to Date
- Your Goal Sales
- Previous Year Sales
These stats will guide you on where you need to spend your energy making up revenue if you’re not on target.
Remember – You Run Your Finances. Not the Other Way Around
There are three things I want you to take away from this KPI’s roundup. First, if you haven’t already, start giving yourself weekly money dates. Second, stop making excuses holding you back from making profitable business. Third, if you don’t know your numbers – you don’t know your business.
Don’t feel overwhelmed if you don’t have Quickbooks or any accounting software. You can still use my accountant’s Weekly Cash Dashboard so you can control your finances instead of them controlling you!