As a Business Owner, it is tempting to try to do everything yourself, we get that! We understand that feeling of independence and self-reliance. When we started out that is exactly where we were at. But one or two blunders later and we realised that we weren’t superwomen!
We couldn’t undertake all these tasks ourselves and that we needed to outsource the stuff we really weren’t very good at. The stuff that took us away from doing what we do best, the Bookkeeping!
Around 90% of our new clients come to us with their books in disarray. As bookkeepers, we find that a lot of our time is spent in fixing up the books that business owners have been doing themselves.
These rescue jobs can be very stressful. Stressful for both the bookkeeper and the business owner and there are a few reasons for that. The main reason is that often the business owner doesn’t realise that their books are a mess until it’s pointed out to them.
Once we have brought them up to date on where their books are at it can go one of several ways:
- The client accepts their books need some attention and engages us to fix them up
- The prospective client sees their accounts aren’t great but doesn’t want to pay to get them sorted and back on track
- The business owner doesn’t want to admit that you are right because that makes them wrong, and no one likes to be wrong.
All Business Owners have blind spots in their businesses – that’s why you can’t do it all yourself! As your Bookkeeper, one of our tasks is to help you stay on track. We will:
- Help you see where improvements can be made
- Guide you on best practices regarding your books
- Help me see past your own PR and get to the truth of where your business is at
- Direct you regarding moving your business forward
60% of new businesses fail in the first three years, despite 50% of those that fail are profitable businesses. Why would that be?
It’s not profitability that keeps a business going, but something else altogether. A lack of profit isn’t always the thing that causes a business to fail.
Four main things that can cause a profitable business to fail…
When I first heard about so many businesses failing – even though they were profitable, I was, at the very least surprised. I started to ask questions, and this is what I found:
- Cashflow – many profitable businesses don’t manage their spending well. They don’t have a system in place to make sure they get paid on time. That leads to cash flow issues, and that leads to the failure of the business
- A Lack of planning – most business owners don’t bother to write business plans. They think it’s not important or they don’t know how (or where) to start
- Lack of support – the business bubble that we create particularly online is an issue. Too many business owners boast when things are going well, but don’t admit when they’re not. That means that failing businesses don’t get the support they need
- A Lack of accountability – when business owners oversee their own books (or have a friend or family member do their bookkeeping) it can cause real problems. It can result in employees not being paid. GST or taxes being returned incorrectly or late and of course, that can mean fines and legal issues
There are many resources to help prevent these issues. There are resources, training and mentoring available for free from the government.
With some business owners, it may come down to the fact that they don’t think they need help.
How do you know if you need business help?
There are some signs that you can look for. If you identify any of these it is an indication that you could benefit from reaching out.
Sign #1: Are you Working more than 40 hours per week?
This is one sign that business owners consistently ignore. It is as if they fully expect that they will be working 41 plus hours, every week. When your business is in order there’s no reason at all to work any more than a standard week. Many of our clients are working many more than standard hours when they first reach out to us.
Some are working seven days per week. BAS time can be crazy, but even then, it can take something dramatic to make them sit up and realise.
Excuses or not, this is a sign your business needs a rescue.
Sign #2: Not working on your business because you are too busy working in your business
If you’re only doing client work and not working on your own business, this is a real heads up that your business needs a rescue. Not everyone wants to grow their business, but you at least want to maintain it right? If you are not working ON your business even that will be impossible.
Sign #3: Your clients are not paying when they should
It is rare that clients have a good reason to pay you late without communicating with you first. If your bookkeeping is not up to scratch though, it can be difficult to manage this.
If you’ve got clients who don’t pay on time (or at all), it can indicate a couple of serious issues in your business:
That you haven’t figured out your target market properly and the people you are working with aren’t it!
You’re still randomly accepting work and not managing their accounts properly
If your clients aren’t paying on time and if you’re desperate for money, your business needs a rescue and systems putting in place.
Sign #4: Trying to put in place too many things
It’s really important to do things in the right order and a great bookkeeper can help you plan this. Often, we try to implement something because everyone else is doing it and we don’t really think about how it fits into our business.
When you plan your destination and design your strategy and bookkeeping around that, then you can choose your tactics. Too many times I’ve seen business owners take on the latest software because they heard it was popular. The reason to put in place new software should only be because it helps you achieve your goals.
Sign #5: You’re not sure where your money is going every month
Are you earning as much as you’d like to be? Do you look at the bank balance at the end of the month with no idea of where all that revenue has gone?
If you’re having money issues or difficulty in tracking your income then it’s a sure sign that your business needs a rescue. You need to take the time to find out how much you need to pay yourself to cover your living expenses, and enter that into your business budget as a “wages expense”. Keeping Numbers can help you work out what is a reasonable amount to pay yourself and how to keep it all legit.
Sign #6: No social life or hobbies
Does your social life totally suck? I know that in the beginning I invested so much time and brainpower in my business that my friendships dwindled away. All I ever did was talk about my business, so it’s not really a surprise that my friendships suffered. And as for hobbies… what are they? I found that I hardly ever left the house when my business was starting out.
If your work and life are not in balance, that is a sign that you need some help. You are probably spending too much time doing things that can be easily given to an expert to do. Free up some time and enjoy the benefits of being a business owner.
Sign #7: You feel stressed or sick
When you find yourself feeling stressed, it’s a sign your need rescuing. If you’re getting sick all the time (either physically or emotionally), then you’ll struggle to work at your best. Your family and your personal time will suffer too.
If you’re finding that your stress is high, and your health is low, or you’re trying to find ways to escape, then you should look for help. Keeping Numbers offers a reliable bookkeeping service across Brisbane, SEQ and Australia. We use online bookkeeping software that means that you can access your accounts information remotely. For an informal discussion about how we can help please give Liz a call on 0405 801 119