Overwhelmed by managing the financial operations of your small business?
We get the question frequently on when a business should hire external help for their financial operations. While the answer will be dependent on each business and situation, there are a few key components that may help you determine if it is time to look for help managing your business.
"What if I told you financial operations should be as strategic and thoughtful as the revenue driving activities in your business?"
First, as a small business begins and starts from the ground level, normally the owner or co-owners are handling all of the work to make the engine run; invoicing, paying vendors, determining how much to pay themselves, and cash flow management. Being able to have control is helpful to understand the flow of the business, hiccups that exist with clients/vendors, as well as the ebbs and flows of cash reserves. However, as things grow, as we all wish happens, the time you are spending on these activities will be higher as the business demands, but your time to do the revenue driving activity is also increasing leaving many owners completing the financial operations work for last. That means at the end of the night after the family is asleep, weekends, and making tradeoffs that impact your personal life. Part of being owner is having to make those tradeoffs, but at some point, it will be beneficial to outsource this portion of your business.
The next step is to have a spouse/partner/friend/family member to help with these activities and this is a great opportunity to manage your time better but depending on who you hire, it may provide the detail level and follow up, but not the expertise you need to continually grow your business. A large portion of people have their CPA help to manage some of this work and payroll which is a great opportunity to make sure you are doing things by the books. If this where you are, ask yourself, is this set up propelling me toward my goals and can this person/firm help me grow as well? For some people, the idea of finance or accounting feels like a necessary evil as part of their business, just like paying taxes. But what if I told you that financial operations should be as strategic and thoughtful as the revenue driving activities in your business?
Financial operations should be both transactional and strategic so that you have the ability to manage the fluctuations that happen as your business grows and changes. So, when is the right time to make this change in direction?
- If you are exceeding $250,000 in total revenue
- You have more than 3 people on your team
- If you are growing significantly, >25% in the last year
- You are unsure of what to pay yourself
- You are interested in potentially selling your business
If you are meeting any of the criteria above, it should be time to explore an external financial operations relationship. If you are close to these milestones but not exceeding any one of them, then I would suggest setting up time for coaching with Christina to assist you with getting to these next thresholds.
SourceUP provides a dual service structure to our clients, providing both transactional (bookkeeping) and strategic structures to ensure that we are providing comprehensive and cohesive solutions to our clients. The point of difference is the strategic framework focused on both short and long-term goals of the owner(s) which includes mindful planning and a budget or business plan to support those goals. We will dive into the details of your business including how your team and their respective compensation plans incorporate into that plan, key performance indicators (KPIs), pricing evaluation, and data analysis which will drive deliberate decision making. We will understand how we can support your business and provide customer service that surpasses your expectations. We will spend time to educate you on concepts and ideas as well as ask questions in anticipation for what comes next for your business.
We have grown businesses and we can do the same for you. Are you ready to outsource financial operations? Let’s meetUP!
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