Take advantage of a surprise profit opportunity. How much you have set aside is up to you and depends upon the nature of your business, but my accountant friends always counseled me to have at least a couple of months worth of operating cash flow in the bank. If youre not there yet, start building up your reserves with what you can until you have a couple of months set aside. This is something else you can talk to your accountant about. . Accounting One of my best friends is a CPA — and a smart one, too. Hes always willing to offer me advice on the financial workings of my business.
He used to say the accounting function is businesses. He also used to tell me that spending time in the numbers was what would make someone a profit expert. I think hes right. Whether or not you do your own books or hire a bookkeeper, its important that you understand the accounting process and what the USA WhatsApp Number List standard financial reports are telling you so youll know if your business is generating, or leaking, profits. Time spent learning and understanding this information is incredibly valuable when running a small business. Most of this insight will give you a deeper understanding of your assets and liabilities and help you better manage your working capital ratio.
In addition to the business metrics outlined above, you should be regularly asking What are my accounts receivables and how old are they? What are my monthly payables? What are my major expenses? How much are they? What are my overhead expenses? How do all these numbers compare to last year, last month, or last week? These business metrics cement success While there are a lot of things you may decide to measure and track, Im convinced these four important metrics are the foundational information you need to run a successful business.