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5 Small Business Financial Best Practices

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Page 1: 5 Small Business Financial Best Practices

www.deskjockeys.co

Page 2: 5 Small Business Financial Best Practices

www.deskjockeys.co

1 Keep Score

Keeping track of the finances of your small business is critical.

Without a historical record of the financial performance of the

business there is no real business.

By documenting revenue, expenses, assets, liabilities and other

financial items you can track and trend performance, as well as

understand the overall viability of the entity.

Page 3: 5 Small Business Financial Best Practices

www.deskjockeys.co

2 Inspect What You Expect

As Small Business owners, we expect to have successful

businesses. But how do you measure “success”? Measuring

financial success means understanding the financial metrics

and KPIs that drive your business.

Without knowing these metrics by heart and on demand, a small

business is left to chart its own course. Inspecting these metrics

and KPIs routinely will help shape a small businesses future.

Page 4: 5 Small Business Financial Best Practices

www.deskjockeys.co

3 Price Well

Beware of competing on price alone. Unfortunately, this is a

trap that many small businesses fall into. The price of your

product/service ultimately dictates the bottom-line profitability of

your business. While you can control expenses to increase

margins, pricing your product/service well will make this a

choice not a mandate.

To price well you need to understand the value of your

product/service. What is the market willing to pay for it? What

differentiates my offering that I can charge more for it than my

competitors? Can I improve my offering to increase the price?

Knowing the answers to these questions will help you

understand the value of market offering and allow you to price

according.

Page 5: 5 Small Business Financial Best Practices

www.deskjockeys.co

4 Do Your Homework

Prior to entering into any new business relationship, new market

any other potentially financially impactful, move do your

homework. Have a keen understanding of how this move will

impact the overall financial health of your small business.

Think beyond the obvious items such as funding or expenses

and determine the opportunity cost of entering into that financial

commitment. What intangibles do you give up? Value your time

and other “soft” costs to calculate the full intrinsic costs of any

commitment.

Page 6: 5 Small Business Financial Best Practices

www.deskjockeys.co

5 Focus

Chasing “shiny objects” and the business trends of the day can

lead your small business astray. Understand what your Core

Competencies are as a business and work on enhancing them.

This does not mean that you shouldn’t look to enter new

markets or broaden your product/service offerings – but do so

strategically.

Page 7: 5 Small Business Financial Best Practices

www.deskjockeys.co

Forecast, Analyze & Track Your

Small Business Finances for

Free.www.deskjockeys.co