Episode 113: Show Notes
Today on the podcast we have the numbers queen Geily Romero. Geily is a financial consultant and business strategist. She has some amazing knowledge all about getting your business financially stable, setting goals and growing your business. On today’s show we’re going over one of our favorite things: profit and loss statements!
We are talking numbers and all the things you need to do to get setup so you can start analyzing the financial side of your business, what mistakes you might be making and how you can start paying more attention to this very important piece of your business. We are also giving you some free solutions on how to make it all happen! Yeah, you heard that right, so stay tuned!
Keeping Track of The Numbers
According to Geily, if you are not aware of what your numbers are telling you and you are not aware of what’s going on with your business financially, then you’re just an employee of your business and you're not the boss. If you have no idea and you need somebody to tell you what’s going on then where is your credibility? Geily never wants that for anyone she works with. She helps empower people so that they know what’s going on in their businesses. You always want to have the upper hand in your business and to be able to make the right decisions to grow your business, so you need to be aware of your financials.
Setting Up Strategies to Understand Your Business
A lot of the time people look at statements and and the profit or losses they have made are pretty self explanatory. Once you have a profit and loss statement, it's important to know how to use it to drive your business in the right direction. From there, what do you do? You need to set up strategies, because how do you know it’s time to make a change in your business or reach out to a brand new audience? It’s not so much just understanding what the report is telling you, you have to figure out what’s working and what is not, determine what you’re passionate about and what you’re going to make work. Keep it simple. If something is no longer working, cut your losses and focus on what is working.
Breaking It Down
What do you need to be keeping track of in order to make your financial statement profitable? Well, according to Geily, it’s the fact that your financials are not even in order from the start. Geily created a financial checklist which outlines the steps where you should start. Spoiler alert! 1: Get a business account. That’s it. There’s no way for you to pull any type of financial statement on your business and your personal accounts, just no way. Get that shit separate. It’s the fact that you can’t pull reports if you don't have things setup. You want to be able to look at your financials and understand them. You need to think about what your financials tell you. Then there’s accounting software, and with so many options out there, you don't have an excuse not to.
Increasing Your Prices: When Is It The Right Time?
Geily has a strategy behind increasing your prices and knowing when you’re ready to do so. Part of it is setting up your prices from the very beginning or if you already have prices, raising them or see where they stand. A lot of time people think raising their prices will solve everything but you need to really consider everything that is going on. There may not be a need for you to increase your prices. When it comes to raising prices or setting them up Geily says that prices will always continue to evolve, you have to look inwards and analyze everything. You have to look at your costs before you can set your prices. You need to make money, not work at a loss.
Common Financial Mistakes Business Owners Make
Geily tells us that the number one mistake people are making regarding financial decisions or strategy in their small business is that they don’t have a business account. She can’t emphasize the importance of this enough. People also don’t have an accounting software system. Those are the two most common but once they get past that then you find people who avoid looking at their financials and that is a huge mistake. You can’t just keep not knowing, you need to know what's going on with your business financials. Also, don’t go by what your bank is saying, because your bank may say $5000 but in reality you may have forgotten that you made a purchase or wrote out a check and because it hasn’t cleared with the bank yet that money still needs to be deducted. Go by accounting. Not setting goals is another mistake business owners make. You need to set realistic, attainable goals to work toward. You need to look at what is giving you the most income and focus on that.You need to look at the WHY. Why are your sales dropping, what happened? Once you know why you can work on strategies to make changes to turn things around.
- Why you need to keep track of and care about your numbers. [0:03:40.0]
- Major numbers that you could be crunching in your business that would give you information about what you can do. [0:05:00.0]
- Breaking it down: What you need to be keeping track of in order to make your financial statement possible. [0:12:10.0]
- The strategy behind increasing your prices and knowing when you’re ready to do so. [0:26:56.0]
- Mistakes people make online regarding financial decisions or strategy in their small business. [0:37:37.0]
- You should be looking at your financials monthly and looking at your revenue.
- Make sure you look at your expenses and know what’s going on with them.
- Look at the bottom line and make it your main focus.
- Be sure you understand your profit and loss.