Financial Spring Cleaning for Your Small Business - A Three Step Guide to Increase Profit
Business spring cleaning - what is this you might ask? A time to check-in with your business and tidy up any loose ends that might be costing you money. Spring is one of the most energizing times of the year. After a long Canadian winter seeing the world burst into life in April feels like a second new year. Although the official calendar starts in January, spring feels like a fresh start. It’s a perfect time to spend a day working ON your business rather than IN your business.
When it comes to the long-term health of your business, strategic planning activities are essential to ensuring you stay profitable, yet they often get bumped off the calendar by more ‘urgent’ matters. And guess what - those urgent matters never go away, so we might as well take the time to make sure our business is set up for success in Q2 and beyond. We invite you to take the time and dig into some business spring cleaning with us, with a focus on increasing your business profits.
We know - no one likes cleaning, but it's necessary and feels so good when it’s done!
After all, those cobwebs building up in your business could be impacting your profitability.
Read on…
But first, one last thing before we dig in - we need to talk about your money.
Money has got to be one of the most loaded topics out there. We see business owners struggle with this all the time. So many emotions get attached to this resource that it can hold you back from reaching your truest potential in entrepreneurship. The idea of approaching the nitty-gritty side of your business may seem stressful right now, and we get it. We also want to challenge you with the idea that money is amoral. It doesn’t have feelings, opinions, and can't hold positive or negative characteristics. It only takes on the characteristics you assign to it. You are its steward, and it's an opportunity for you to make it work for you. The only way to do that is to get to know it better! You are in the driver's seat on this one, and we are here on this corner of the internet to help you. Okay - enough of the pep talk, let’s get to it!
Here is a three step guide to decluttering your business this Spring:
Step 1: Review your Income - Are you charging your worth?
When was the last time you evaluated your pricing? This can include the amount you are charging clients and how you are setting them. To begin digging into your pricing, answer the following:
- Is it time to raise your prices?
- Have you followed up on overdue invoices? Time to fire off some emails!
- Do you have an interest charge on overdue amounts that you don’t apply consistently? Is that serving you, or only making it appear that you don’t stick to your boundaries? It’s a good idea to review your standard contracts and see if you need to make some changes in the future.
- Do you have a client that is draining your energy? Perhaps it’s time to say goodbye to open space for something better. We have all been there as service providers. Sometimes it’s just not a good fit.
Step 2: Review your Expenses - Where is all my money going?
Expenses can get out of control quickly, especially those monthly subscriptions. From time to time, it's a great idea to take stock of your expenses with a critical eye. Take a look at these things in your business:
- Show us your tech stack! We don’t know about you, but we use a ton of tech, and most providers operate on monthly subscriptions. It's a good idea to look at what you are spending and whether some of these apps are actually benefiting your business. We recommend taking the time to figure out if there is a single solution out on the market that can decrease some of your expenses.
- Is there a more efficient or affordable way to get paid rather than accepting 3%+ credit card fees? Could you consider a pre-authorized debit agreement? Depending on the volume of credit card transactions you process each month, you could be up for significant savings.
- Have you purchased a course or digital product you haven’t taken advantage of yet? Now is the time to schedule that in your calendar and hold your commitment to it.
STAY ON TOP OF YOUR BUSINESS FINANCES WITH MY DIGITAL BOOKKEEPER
Step 3: Complete a mini growth plan:
- Look for areas you can reduce expenses.
- Are you collecting on all your accounts receivables?
- Are there processes in your business that could become more efficient, and thus save you time and money.
- Is it time to develop a new product/service offer? Take note of your revenue growth patterns - if they are falling flat or slowing down, it could be time to shake things up with your product and service offerings and identifying new ways to serve your market.
- Take note of what your competitors are doing. This helps you keep a pulse on what your clients might be interested in and assists in identifying trends in the market.
Answering some of the above questions probably got the wheels turning! Now that you have taken care of some of those non-glamorous parts of your business, it’s a good idea to take some time to think about what your goals are for the coming quarter or two.
The bottom line:
Spring is an opportunity. A second fresh start in the year! Your business will thank you if you booked a day and spent some time deep-diving into all the parts of your biz that don’t usually get your attention. One trick we use to make the day ‘special’ is to treat ourselves (favorite fancy drink anyone).
Happy spring cleaning!
Need some help from a CPA?
We’ll let you know where you stand so you know which way to go.
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Wishing you success in your business,
- Martina + Ashli
Date published: April 1, 2022
Disclaimer - The information provided in this blog is general in nature and solely for educational purposes. Readers use and implementation of the information comes at their own risk and is their own responsibility.
