Money Matters: How Proper Bookkeeping Can Make or Break Your Business
Today, we begin with a story... In Austin, everyone knew Alex for his fantastic home-based fitness training. When one of the town's top gyms wanted to collaborate, it felt like a dream. A renowned gym wanted to partner with him. But when they delved into the nitty-gritty of finances, Alex was caught off-guard. He couldn't pull up his gross profit for the past year or two. They seem to have politely imply some of his balance sheet accounts seemed off. His basic money tracking wasn’t going to impress anyone. It was a wake-up call: Having passion and being the best at what you do was great, but managing money was equally crucial when running a business.
Why Keeping Track of Money is Important from the Start
Think about Alex. Keeping track of money isn’t just about counting. It's about:
Knowing where your money goes: This helps you make better choices.
Showing others you're serious: When you have clear records, others trust you more.
Avoiding mistakes: Missing or wrong numbers can cause problems.
What People Want to Know About Your Money
If you want to team up with others or get a loan, here's what they might ask:
Partners: They'll want to know how much you make, how many customers stick around, and if the team-up will last.
Banks: If you want to borrow money, they'll check if you make enough to pay them back.
Customers: Some might want to know if you're doing well, especially if they plan to work with you for a long time.
Should You Get Help or Do It Yourself?
Don't fall for the myth that your bookkeeping software is going to do the work for you. Just like everything else, any software is a tool and the quality of information your tool will provide as an output is only as good as the user who knows how to input the information correctly right from the start. So, in addition to purchasing software, you have two choices: getting help or doing-it-yourself.
Good Things: Experts can do the work right and save you time.
Not-so-good Things: It costs money. You need to find someone who understands your work.
A Tip: Even if someone helps, check in and understand what's going on.
Doing It Yourself:
Good Things: You save money and are in charge.
Not-so-good Things: It takes time and you might make mistakes if you don't know how.
A Tip: Learn proper bookkeeping through online courses and get yourself leveled up on the knowledge to do things right. Use software to help and check your numbers regularly.
Alex's story is like many others. If you're running a business, you need passion and good money skills. So, what will you do? Will you be ready when someone wants to work with you? Or will you miss out because you didn't keep track of your money? Whether you do it yourself or hire someone, make sure you know how your money's doing. It's not just about counting cash; it's about making your business strong. So, start now.