Running a business can be a gratifying experience. While there are many highs with running a business, there are bound to be low moments. Some of these are inevitable, providing a company with a learning experience that they can use to grow. However, other experiences could have been avoided with the proper planning and preparation.
For instance, a frequently overlooked aspect of a business is putting a financial plan in place. In the early stages of a company, time is crucial and precious. Business leaders will understandably want to utilise their time by focusing on new ways to promote their business, improve the service or product they offer, or uncover new areas for the company to grow.
Financial planning and management are two crucial components in running a business. Without them, it can put a business in an unfortunate situation. For example, a reported 18% of start-ups in the UK fail due to pricing and costing issues. 29% fail because they ran out of funds. The statistics on start-ups in the UK highlight the importance of businesses prioritising their finances.
Business leaders should prioritise financial planning and management. The advantages they can reap should be motivation, and here is why.
Advantages Of Focusing On Finances
Focusing on finances and managing them is a timely process. Despite this, it is still a task that needs to be completed with great care and attention. It is the foundation of a business and can help drive them towards meeting their targets. Funds help a business to grow and it should be invested back into the business to help them excel. It could be by hiring new employees, investing in the latest equipment, improving its security systems or using solutions to help operate a more effective and efficient business.
After implementing financial planning and prioritising finances, these are just a few benefits businesses could experience.
- Opportunities For Growth– A shared goal for every business is the opportunity to expand. Profit is one of the critical aspects to help a business flourish. However, there are also other variables worth considering that could support the expansion of a business. For a business to grow, the company also needs to have new equipment and additional talented employees.
- Provides Positive Image– How a business is perceived has many benefits. A positive image can entice customers to purchase their services or products. Positive reviews can make a company appear trustworthy, an attribute customers value. For investors, when businesses have proper financial management and can provide business plans, it gives the impression that they are trustworthy and can grow. Offering a reliable image can attract investors into wanting to invest.
- Establish A Backup Plan– There are times when targets are not met in the business. Financial planning allows for your business to be covered during these challenging times. By planning for such an event, you will likely be in a better position than most businesses. Some might not have planned their finances to cover the costs of profit loss. With adequate planning, you can develop an insight into the areas causing the problem.
- Ease In Measuring Success– Strong financial planning in business is more than preparing for the future and growth of the company. It measures how far a business has come, taking note of the areas that have proven to be the most effective. Businesses unaware of their starting point will be unable to measure how far their company has grown accurately. The ability to measure success could help enterprises uncover new investment areas to help the company grow.
How To Prioritise Finances
While adapting your financial processes might not seem like a big deal, it can make a significant, positive difference to your company.
Regardless of whether a business is just starting or has been around for years, it is never too late to prioritise its finances.
For business leaders looking for ways to prioritise their finances, these are various tactics worth considering to help improve their company’s current financial situation.
Seek Professional Advice
Business leaders will unlikely have professional insight into all topics. This is why they hire talented employees to tackle specific areas of business. Business leaders might have a basic understanding of finances but will likely lack professionals’ in-depth knowledge.
When business leaders begin focusing on their finances, finding ways to improve and ensuring they remain a priority, expert advice can help with the process. Finance experts will likely keep themselves updated on any new rules, regulations and alterations made. Their knowledge can be shared with business leaders to prioritise their finances. They could show them the areas they are struggling in and succeed. From there, they can collaborate to help business leaders put their finances at the top of the priority list.
Additionally, they may even implement tactics and strategies to help ensure that the work and progress made does not fall behind. It could provide excellent support for business leaders as they continue to grow and expand their businesses in the years to come.
Learn More About Finances
To further help prioritise finances, business leaders should consider taking short online courses. For instance, they could take an online certificate course from the London School of Economics and Political Science (LSE). There are a variety of LSE short courses available online. They each cover numerous topics and areas but can provide a wealth of knowledge and insight. Having this information can help business leaders make more informed decisions about their company’s financial situation. The various LSE online certificate courses to choose between also allow business leaders to seek guidance and speak with professionals within the field. Building these vital connections and learning more can offer business leaders opportunities to ask for advice.
Regularly Review The Budget
Budgets are not permanent. Depending on the situation, they can be altered to accommodate the changes. Conducting a monthly review of your company’s finances can offer a detailed overview and insight into how the business spends its money. It can highlight any areas that need changing as the business grows and evolves. Monthly reviews can also allow business leaders to budget better and ensure the company’s money is being put towards the future of the organisation.
The Bottom Line
Companies should ensure that their financial strategy and business goals align to achieve a successful finance transformation. Where possible, avoid focusing on other organisations within their sector. It reduces the time spent on comparisons and monitoring their progress. Instead, businesses should focus on their strategies and how their team will achieve them.
Transforming your business’s financial situation by implementing management and planning tactics can be a challenging process. It could be met with some resistance at first, but if it puts the business in a better financial position, it should be something business leaders consider.
The time spent improving and prioritising a company’s financial situation will most likely be noticeable in their successes. It could help to make a more robust and efficient business, so use these tips to start exploring new ways to manage your company’s finances.
Ingrid Maldine is a business writer, editor and management consultant with extensive experience writing and consulting for both start-ups and long established companies. She has ten years management and leadership experience gained at BSkyB in London and Viva Travel Guides in Quito, Ecuador, giving her a depth of insight into innovation in international business. With an MBA from the University of Hull and many years of experience running her own business consultancy, Ingrid’s background allows her to connect with a diverse range of clients, including cutting edge technology and web-based start-ups but also multinationals in need of assistance. Ingrid has played a defining role in shaping organizational strategy for a wide range of different organizations, including for-profit, NGOs and charities. Ingrid has also served on the Board of Directors for the South American Explorers Club in Quito, Ecuador.
