9 Tips for Managing Your Business Finances—Guest Post from Dave Heistein
Look underneath the surface of any good business, and you’ll typically find finances that are well-managed and in order. This is why I wanted to invite my personal CPA, Dave Heistein from ProfitwiseAccounting.com, to write a guest post to talk about what we as entrepreneurs can do to best manage the finances of our business.
I’ve been working with Dave for over five years now, and he’s been fantastic. CPAs come in all styles, and I love working with Dave because he’s always very honest and he plays it safe for the benefit of my family and my business. Here he is with some tips to help you manage your own business finances, no matter what level you’re at right now.
Most of us would agree that highly successful people tend to share common traits such as tenacity, vision, hard work, luck, and business savvy. We often say these people, like Steve Jobs, Mark Cuban, and Bill Gates, have the “midas touch,” because they seem to have the aptitude for turning the majority of their business ventures into great successes.
We would also not be surprised to learn that these successful entrepreneurs have all become masters of managing their business and personal finances to a certain degree by virtue of their enormous success. People like Mark Cuban and Bill Gates have their own financial teams that oversee and make recommendations to them and to their businesses that ensures they are making the wisest financial moves and avoiding potential legal, accounting, and tax landmines and pitfalls.
As the managing partner of a small business accounting firm, I have worked with hundreds of entrepreneurs throughout the years. When it comes to managing business finances, not surprisingly, the tax and accounting elements of these businesses are typically not well understood. Additionally, most entrepreneurs don’t enjoy the administrative and finance side of their businesses and would rather focus their time and energy on developing their product or service, sales and marketing, and growing their businesses. As a result, the financial side of the business becomes severely neglected and can create unneeded legal, tax, and governmental compliant risk as well as undermining their own business success.
In my opinion, the best two strategies for becoming one’s own “master” of business finance are:
- To become a lifetime learner
- Surround yourself with a great advisory team
Core Strategy #1: Become a Lifetime Learner
Our clients who tend to be the most successful are continually absorbing new information, broadening their knowledge base by reading and attending seminars, as well as seeking consistent advice. Those who don’t do as well typically have an aversion to all things financial and tend to bury their heads in the sand and hope that the stars will all magically align for them someday.
Additionally, when it comes to their business, most of our successful clients are experts in their industry, and have a keen understanding of the key business drivers and points of difference that separate them from their competitors. For example, we have a successful daycare provider client who is opening up new locations throughout the US. I was amazed to learn that he researched over 100 different day care centers currently in operation and