Let’s talk about how to manage your finances as a small business… we know that doesn’t sound like the sexiest topic in the world but here’s three reasons why you need to keep reading (and watching the video below), we’re going to:

  1. Show you how to grow your business faster by knowing where to focus on
  2. Help you make smarter decisions so that you can achieve your goals faster and reduce overwhelm
  3. Make you feel more confident in just about everything you do in your business

So let’s do this! 🙌


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Let’s talk about how to manage your finances as a small business… we know that doesn’t sound like the sexiest topic in the world but here’s three reasons why you need to keep watching, we’re going to:

  1. Show you how to grow your business faster by knowing where to focus on
  2. Help you make smarter decisions so that you can achieve your goals faster and reduce overwhelm
  3. Make you feel more confident in just about everything you do in your business

How having a grasp of your finances helps you

By using the data that you have in your business, you can stop making rash, emotional decisions that just waste your time. And that’s why getting a grip on your finances, is crucial to your success.

The fact is, the tighter grasp you have on your finances, the more money you’re going to make. If your finances feel a little bit all over the place, if you don’t know how much you’re earning, you don’t know how much you’re spending, where the money is coming from, how much extra you have to play with, and if you’re very much living hand to mouth, then you don’t make great decisions.

On the flip side, if you can account for every single penny in your business and you feel confident that you know your figures inside and out and your financial situation, then you can start to make more confident, logical decisions, to get to your goals faster.

And even if you’re just starting out, we want to make sure that you start out with the right financial habits. Here’s a super simple process that you can use.

Set up a business bank account

This one is easy. Make sure you set up a business bank account, to separate your business finances from your personal finances.

Especially if you’re a sole trader, mixing your money is not smart and it just makes everything harder.

Track your incomings and outgoings

You need to start tracking incomings and outgoings month on month. You need to know where your money is coming from, where your money is going to and importantly, how much profit you’re making each month.

And you can literally do this in a spreadsheet. You do not need any kind of fancy software.

Have income at the top and break down your income streams, either by client or by product, or just whatever makes sense to your business.

Make sure you’re totting that up every single month, so you know what your total turnover is month on month. And then list out all your different costs under expenditure at the bottom, and total monthly income minus total monthly expenditure is your profit, simple maths.

Now a side note, it’s often smart to break down your expenditure into two types of costs. Cost of goods sold or direct costs, which is the direct cost of delivering your product and service.

For example, if client A is paying you £1000 but you outsource £200 worth of that, the cost of goods sold or the direct cost of client A, is £200.

The second type of cost is overheads. These are things that you have to pay, no matter how much you sell. So this is things like website hosting or rent… or Pete’s hair products 💆‍♂️ Pete just goes through so much, no matter how much we sell. It’s actually going up each month.

Since we have an outsource team too, in ours, we break this down into a separate section of cost as well, just so we can see how much we’re spending on our outsource team.

You can make this as simple or as complicated as you want. You can add in things like tax or VAT or dividends, but if you haven’t done this before, just starting simple is best and you can make it more complicated as you go. The important thing is just getting more clarity into like how financially healthy your business is, because that leads us on to step three.

Have a monthly meeting with yourself

Of course it doesn’t have to be just yourself, you can do this with a business partner, a friend, or your accountant. The important thing is to look over at the numbers, analyse what went well, what didn’t go well and how that’s reflected in the numbers.

Doing this may also show you things such as which one of your offerings is the most lucrative and therefore where you should maybe focus more of your time and energy and resources.

It will also show you what you should probably stop doing or maybe where you could even save money. Doing this helps you understand the mechanics of your business and you can start to see if the effort and the resources and time and energy that you’re putting in into your business is actually having a real impact on your bottom line.

Planning and goal setting

Once you’ve got a better grasp of your business, you can start doing the fun stuff.

You can say things like, right, if we wanna make five grand next month, turnover/sales, how many more clients do we need, based on what we’re currently doing to get us that?

And you can take the emotion out of things like hiring people. So if you want to hire someone to help you with your client load, you can start saying, right, if we take on an outsourcer and it’s X pounds a month, can we actually afford this?

It means you’re not just like using your gut, you’re using the data your actual business is telling you.

We can also start seeing how much profit we have left over each month and start saving that towards something really exciting. And, the numbers will basically tell us how long it will take us, how many months it will take us to get there.

There are some really cool online banks out there, like Starling bank or Monzo or Tide, that allow you to set up different pots or different accounts for saving purposes.

If you want to dig into this more then download a copy of our template and and start using it to make more profitable business decisions. We cover this in a tonne of depth in Ground Zero which is the first part our Become Atomic training in our membership Atomic. You can grab a trial of that here.