When you're running your own business, you have to be something of a jack- (or jill) of-all-trades. You oversee the products or services you provide, you manage relationships, you manage a staff and vendors, you troubleshoot all kinds of problems. And of course, you're in charge of your company's finances. When you started your business, you may not have seen yourself as a "money person." That was for accountants and investors. But as soon as you became the person ultimately responsible for the bills – as in "The buck stops here!" – like it or not, you became one. So not only is it important for you to know as much as possible about your company's finances, but you should try to learn as much as you can about managing money and finance in general. I like to think of this as raising your financial IQ.
Regarding your company’s finances — and I know you know this! — you’ve gotta know what’s going on! That means knowing your monthly expenses and revenue... as in knowing the actual, accurate numbers, not the vague numbers that you kinda sorta think you have! The best way to do this is to have a detailed coding system to track everything. And I do mean EVERYTHING! Costs — expenses, labor, overhead, basically everything that you have to pay for directly or indirectly – time spent on each project, and all income. This is the key to having a high financial IQ. If you have an organized system in place, and if you commit to following this system religiously, you'll have a much clearer picture of how much money you're actually making.
Raising your financial IQ can raise your profits!
Once you know where all your company's money is coming from and how it's being spent, you can start tightening up how you do things. Reducing your costs by being more efficient will automatically put more money in the bank for you. Of course, getting to that point requires some work on your part. But isn't it worth it?
Don't be too busy to focus! Invest in a good financial tracking system and your business will benefit! In my book, But Are You Making Any Money?, I walk you through setting up such a system, step by step. Think of it as a tutorial to increasing your financial IQ. Reading it may not get you a membership in Mensa, but it will help you make more money, which is far more valuable!
This week, we've got a roundup of quotes from some of my favorite authors (including yours truly!) to help you focus on your financial IQ and understanding more about money. The Richest Woman in America, by Janet Wallach, tells about the life of Hetty Green who was a resilient pioneer for women in business worth millions (which today would translate to BILLIONS!!!) at the end of her life. Also, take a look at 57 Fascinating Business Facts That Will Blow Your Mind from BuzzFeed News.
Check out the summary of last week's business tips and motivational quotes from my Instagram page which you hopefully got to see in real time! If not, let's make sure we're following each other on Instagram!! So...here is this week's roundup of Instagram images of My Top Business Tips and Motivational Quotes.
Financial IQ – Tip #1:
"Watch your pennies and the dollars will take care of themselves."
Financial IQ – Tip #2:
"Define your brand! What are the benefits and features of your products or services?"
Financial IQ – Tip #3:
"The more you talk about money, the less scary it gets."
Financial IQ – Tip #4:
"Happy customers will feel an emotional connection to your company's brand."
Financial IQ – Tip #5:
"Changing the U.S. $1 bill for a $1 coin would save the U.S. $4.4 billion in 30 years."
What's your financial IQ? I want YOUR stories on how you changed the way you track your money!
So, did any of this info sound familiar? Have you ever made changes in how you track spending and revenue? Knowing where your money is going is one of the most crucial aspects for a small business to be profitable. Which tips above did you find helpful? What are your thoughts on understanding customers? I would LOVE to hear from you!
Anyhoo...I publish these business tips and motivational quotes to get you fired up for your work week! And, if you want more business tips, get my book, But Are You Making Any Money? or contact me to really take your business to the next level!
P.S. Of course that's not all we've got! Searching for more small business tips that help you increase your financial IQ?
Then definitely take a look at these:
I'd love to hear your ideas! So please comment below and then SHARE!