The main purpose of a business is to make MONEY and the only way to know if you are doing so is by having a proper financial management system in place irregardless of whether your business is just one month old.
Based on your revenue the following tips will help you figure out which kind of financial help is suitable for your business.
1.If you are making less than Kshs. 200,000 p.m
During the early stages of your business you are validating your business idea. You are testing if you have a sustainable business that has longevity and so your focus should be on creating recurring revenue.
Don’t bring on anyone to reduce expenses.
Separate your business accounts and personal Accountant.
Use Quick books self employed, Quick Books online or Waves.
Hire a finance expert e.g. Quick books expert to TRAIN you.
2. If you are making between than Kshs. 200,000 – 500,000 p.m
The key focus should be on streamlining processes and improving margins. Focus on being efficient with your time and resources because you can make more money without making more sales.
Bring in an Accountant or specialized bookkeeper at least once a month.
The 80/20 rule says that 80% of your income comes from 20% of your clients so improve your value and offer by streamlining inefficiencies.
Determine your low profit products or services and improve or eliminate them.
3. If you are making more than Kshs. 500,000 p.m
It’s about scaling your business strategically and the key is to become proactive as opposed to being reactive to your business.
Bring in a Virtual C.F.O who will help you predict your future and bring your business to the next level.
Create custom dashboards and reporting
Build out a tax strategy.
Let’s get a clearer understanding of the role of each person that you bring on board.
Has the knowledge of doing basic accounting by managing activities such as making sure invoicing is done, bills are paid e.t.c
Is in charge of tracking the day to day transactions of your business so that they are properly recorded. Makes sure that past records reflect in the financial data.
Takes the financial information prepared by an Accountant and figures out how to get to the next level. C.F.O’s are forward thinking and usually take on outside data i.e industry analysis to make decisions.
And that’s how you know .