I remember clearly when a popular social media strategist asked me “Do you have a marketing strategy for 2018?” I didn’t expect that she would ask me that question. After all, I had just met her at a marketing conference. I nervously thought to myself…“I know I have a marketing plan but I’m not 100% sure if I have a marketing strategy.” I didn’t want to embarrass myself in front of this person so I told her, “of course I have marketing strategy!” I walked away thinking that I needed to get a marketing strategy and fast!
Strategy has been a popular word in 2017. Everybody is calling themselves a “strategist” these days – social media strategists, branding strategists, business strategists, and more. Well, now it’s my turn to make you slightly nervous. My question to you is “Do you have a business financial strategy for 2018?”. Before you say “yes” without even knowing what financial strategy is, I’m going to share with you the 3 essential financial strategies you should implement in 2018.
What is strategy?
Strategy is simply a plan for achieving a goal. The most important part of strategizing is identifying what your goals are. Financial strategy is a financial plan for achieving goals in your business.
[bctt tweet=”The most important part of strategizing is identifying what your goals are.” username=”5MinBookkeeping”]
Financial strategy #1 – Minimize the time you spend working on your bookkeeping
If you’re a small business owner, now is the time to decide whether you should DIY (“do it yourself”), delegate, or outsource your bookkeeping.
If you will continue to DIY your bookkeeping in 2018, ask yourself:
- What are some ways in which you can save time on doing your own bookkeeping? Perhaps establishing a daily routine and organizing yourself will make things more manageable for you.
- Are there any skills you need to improve so that you can work with more confidence and eliminate messes and doubt? Check out our online courses, including:
If you want to delegate some of your bookkeeping in 2018, consider:
- Is the employee who will be taking on some of the bookkeeping properly trained? If not, check out our online courses
- Are you aware of the potential for employee embezzlement and are you protecting yourself? Check out my blog post “Could you be a victim of embezzlement and not even know it?”
Is outsourcing your bookkeeping a better option for your business? Then consider:
- Finding the right financial team is paramount. It’s not just enough to find someone who can “do your bookkeeping”. You should find a trustworthy and reliable team who does timely and quality work and who integrates technology into their processes in order to minimize the time you spend on your bookkeeping. (If outsourcing your bookkeeping is right for you, check out my accounting firm to see if we might be a good fit).
Now is the time to set your first financial strategy – will you DIY, delegate, or outsource your bookkeeping in 2018?
Financial strategy #2 – Set financial goals
Most business owners have an idea of what they want their sales goals to be in the coming year, but they rarely create a financial forecast. One of the most valuable things I did this year is to set up a written financial forecast. In fact, my forecast includes key performance indicators like:
- Revenues
- Gross margins
- Gross margin percentage
- Expenses
- Net income
If you use QuickBooks Online “Plus” version, you can set up a budget in QBO. After you set up the budget, you can track actual vs budget to see how you are doing.
My preferred tool for setting and tracking my business forecast (i.e. budget) is LivePlan (affiliate link). With LivePlan, I can easily forecast sales, employee costs, and other expenses.
Financial strategy #3 – Measure your success
The third financial strategy you should implement in 2018 is to regularly measure your success by regularly reviewing your financials. I have a monthly “financial strategy” meeting with my accounting manager each month. This forces me to review my numbers and to see how I am truly doing financially. This wasn’t easy for me at first, because I was worried that I may not be doing as well as I planned. But, I got over my worry and fears and I used this process to empower me to stick to my financial goals.
My financial strategy meeting consists of the following:
1. Review key reports, like:
- Profit & Loss
- Balance Sheet
- Accounts Receivable aging
- Budget vs Actuals
2. Review key performance indicators, like:
- Sales and expenses by month
- Sales and expenses compared to prior year
- Gross profit percentage
- Expense break-down
- Bank balances by month and compared to prior year
3. Review and update our forecast for the rest of the year
If you want to feel in control of your business financials and hold yourself accountable to your financial goals, I highly recommend that you implement a monthly financial strategy meeting. The first thing you should do is to schedule time on your calendar each month to review key reports and to monitor key performance indicators. Make it a habit – you and your business deserve it.
Final words
I’ve shared with you the 3 essential financial strategies you should implement in 2018 in your business. Now is the time to make a plan and to implement at least one of these strategies in the coming year. You’ll be amazed at transformation you’ll experience as a business owner and how your business will benefit by implementing these financial strategies. It’s been a game-changer in my business. I wish you much success in the coming year.