This piece comes from guest writer Katie Hutton, a marketing specialist for Eide Bailly. Eide Bailly is a Fargo-based certified public accounting and business advisory firm. Katie’s work brings her in connection with many local entrepreneurs and small business owners, each struggling to balance the finance end of starting a company. Here, Katie compiles a few key tips that she has seen proven useful over the years.
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It’s ironic I’m writing this as the most non-numbers person in numbers land. But then again, if this number illiterate professional can learn these tips, I have no doubt you fabulous people can too.
I’ve been at Eide Bailly for two years. During that time I’ve learned the importance of financial data and its ability to shape the conversation about your business and move your business forward (or backward if the numbers aren’t accurate). Here are seven of the biggest tips I’ve learned:
1. Understand the basics.
I know, I know, numbers can be aggravating, infuriating and downright confusing. Maybe you get the financial side of your business. But if you don’t, I strongly urge you to at least get a grasp on the basics (accounting method, basic tax rules, entity type, etc.), because they’re essential to understanding your business. If you don’t know or don’t get it, ASK.
2. Compare away.
Forget all those quotes about “comparison being the thief of joy” or whatever else they say. In business, comparison can be a very good thing. By benchmarking your organization you can: understand your situation (read, know how you rate and how you can improve), get real-time data and gauge success. Plus, if you find the right benchmarking data, you can compare everything from profit to inventory to staff.
3. Collaborate, collaborate, collaborate.
Recent research has shown that startups who work in coworking spaces are four times more likely to succeed than those who don’t. Four times! This is due in large part to the network that is built and the relationships fostered. The same can be said for accounting.
4. Collaborate WITH your accountant.
One of my favorite quotes comes from an article in Entrepreneur: “A CPA should be a partner in your entrepreneurial dreams. You don’t want to dread a trip to the CPA like you dread a trip to the dentist.” Do more than hire someone to do your taxes or a friend with a calculator to manage your books. Find a trusted business advisor.
5. Collaborate on resources.
There are some things that are really great for a startup to have (like CFO level advice) that you just can’t afford right away. OUTSOURCE it. Share the resources and help build your business early with sound financial advice.
6. Know your person.
The only way to achieve the aforementioned collaboration with your accountant is to know them, and to know their capabilities. Find a person who wants to work with you, rather than for you, someone who doesn’t think they’re the greatest thing ever, and who knows about startups and small businesses.
7. Begin with the end in mind.
Why did you start your business? What did you hope to accomplish? Are you looking to sell? Or are you looking to grow the organization you love? Do you want to retire early? These are the types of things to consider early on so you can plan financially from the start. By talking to your accountant about your goals from the beginning, you can hopefully reach these goals faster.