As a business financial planning consultant, I often get asked, “What’s the most important thing to pay attention to with my business finances?” It’s a great question. Let’s dive into a few of the possible answers of what is most important in business finance.
Business Finances – Like Driving a Car
I could say, “it depends.” Think of your car in the garage. What’s the most important thing when driving it? Staying within the speed limit is crucial, but if you don’t have gas in the tank or a charged battery, you won’t go anywhere so speed laws won’t matter. Proper vehicle maintenance also affects everything else you want to achieve with your car.
Consider These Business Finance Variables
Business finance works similarly. Revenue is important, but without reasonable profitability, your business will be broke in no time. While earnings are often the one, pay-attention-to-this-and-you’re-good factor thrown around by the media, solely focusing on them can lead to trouble.
Cash flow is just as vital as profitability for operational success. Making money doesn’t guarantee having enough cash to pay bills when they’re due. Additionally, finding the right balance between current spending and future investments is influenced by customer service goals, quality standards, and the value you place on your employees.
Business Finance Focus Will Change
Every business finance situation is unique, with numerous factors at play. Your focus next year may differ from today. However, one universal concept remains: regularly paying attention to all your business finances yields better results than ignoring them.
This is where working with a financial professional becomes invaluable. All those variables? We can make quick sense of them and help you prioritize the most important items for today.
This Wealth Health Curated Content was sent by email to our community days before we posted it to social media. Subscribe now to get future articles into your inbox before everybody else gets to see them.