Finances are vital to the growth and long term survival of any women-led business. It ensures that your company has money to spend at its very basic level. However, there is so much more to your business finances than just that. When your current, historical and even future or forecasted financial data is organized and managed correctly, you can use it to power your business growth. You’ll not only have money to spend, but it can also give you insights on where, when and how to spend it.
How a stack of numbers and reports can help
Many women founders and business owners often take charge of the finances, which makes good business sense, especially in the initial stage of any new company. But when operations get bigger and your business is currently undergoing a rapid growth phase, or you are poised to scale operations up, it’s essential to seek help or find someone with a solid background in financial management for your business. Not only will they handle financial reports, budgets and forecasts, they can also come up with both a long and short term financial strategy for your business. Hence, it has a roadmap it can follow for continued – and future – success.
Do Some Financial Housekeeping
But even before hiring a financial manager or setting up a financial team, you need to do some financial housekeeping first. Take some time to check all your existing financial reports and data. These include profit and loss statements, cash flow reports, tax returns, balance sheets, open invoices and more. Find out if they are updated and filed, or organized properly. They will serve as an arsenal for your finance team to develop long-term goals and objectives for your business. You could also be saving your business money since you won’t be making decisions based on incomplete or wrong information.
Additionally, you can look at the data with a critical eye and ask pertinent questions about them, including who are your customers? How much are you spending and earning? And, of course, identify gaps in information and any opportunities to save or expand. Come up with that list and present it to your finance team to deep dive and recommend what the company has to do to make them happen.
Study Industry Data Too
To further use your financial data to support your business, go macro and study not just financial trends in your industry but in related industries, your district and country as well. You’ll have a wider pool of information and insights when making decisions about your money. It’s also helpful to research your financing options – even if you don’t need them yet. Having some background knowledge early on will make it easier for you when your business needs an infusion of capital via angel investors, loans and more.
So to answer the question above, that stack of numbers and financial reports represents how financially healthy your business is currently. By studying them and the insights they provide, you can jump-start the growth and success of your business.