Hate Managing Business Finances?

Most entrepreneurs hate managing business finances. Here’s 10 tips to help you profit more and stress less.

10 Tips for People Who Hate Managing Business Finances

Can we just be honest about something? Most entrepreneurs hate managing business finances.

I know most people don’t put it that bluntly, but I’d rather get straight to the point.

You might love what you do. But when it comes to crunching the numbers you feel like pulling your hair out. Or worse … packing up shop altogether.

Let’s just clear the air and say you’re not the only one. Very few people start a business because they want to manage finances.

Still, you can’t run a company without taking care of the finances. Besides, all those things you like about your business become even more fun when you’re making a great profit from them.

Managing business finances might feel like a necessary evil. But they don’t have to suck the life out of your work day (or steal precious time away from your family).

In fact, with a couple of pro tips you can actually make more money and stress a whole lot less. Sound like something you’re interested in? Then you’re going to want to jump on my 10 tips for people who hate managing business finances.

They are:

1. SIMPLIFY, SIMPLIFY, SIMPLIFY
2. Understand Real Revenue (what’s REALLY available to you)
3. Bring Fun Back to Your Finances
4. Leave Your Baggage at the Door
5. Cash May Be King — but Cash flow is Queen
6. There Are Only 2 Types of Outflows
7. Let Your Accountant & Banker Do the Heavy Lifting
8. Plan for Profit Distribution Day
9. Embrace the Profit First Method
10. Partner with a Certified Profit First Professional

Let’s break these down one at a time.

1. SIMPLIFY, SIMPLIFY, SIMPLIFY

There’s a reason I repeat this one three times and put it in all caps. It’s that important. (I thought about making it flashing neon, but figured that was overkill.)

Most people hate managing business finances because they make it way too complicated.

You know why? They feel like it has to be.

In reality, the opposite is true.

When your books get messy, you end up leaving money on the table. And the more complicated a financial plan, the less likely you are to follow it.

That’s why if you hate managing business finances, the most important thing you can do is simplify.

2. Understand Real Revenue (What’s REALLY Available to You)

A lot of business owners confuse total top line revenue (what’s coming through the door) and what’s actually available to spend.

When that happens, things get messy quickly.

You start spending all you have and wind up with debts you can’t pay.

All you need to do to fix this is have a model in place that allows you to separate what’s available to you and what’s not (more on that model in tip number 9).

Then there won’t be any confusion on where your money is going or how you’re going to pay for everything.

3. Bring Fun Back to Your Finances

We often make finances scarier than they need to be. We tie too much information into them or wrap our self-esteem up in them. Instead, you need to realize money is simply a tool to get you from where you are to where you want to be.

Getting where you want to be should be fun. But that journey becomes stressful when you don’t have a plan.

Try going on a road trip without a GPS or a map. Pretty soon that fun journey will turn into shouting matches and missed turns.

Managing your business finances without a plan is the same way. What was meant to be exciting turns into a nine-to-five nightmare.

But when you have a plan, finances turn from something threatening to something that’s actually … well, fun. Managing your money creates an opportunity to dream big and set challenges for yourself.

4. Leave Your Baggage at the Door

We bring money baggage to work with us every single day. It comes home with us and often it even crawls into bed with us, waking us up in the middle of the night to take away our health, wellbeing and peace of mind.

This baggage can look different for all of us. Maybe it’s a limiting belief or a bad experience from years ago. Whatever shape it takes, it’s a major reason entrepreneurs hate managing their business finances.

So we have to let it go.

How? First, we have to identify what our baggage is. What are we holding onto? When it comes to money, what’s holding us back?

And then here’s the secret. You can’t just automatically let it go. You need an alternative to grasp onto.

It’s so hard to let go of our baggage because it’s what we operate out of. The only way to get rid of it is if we can get hold of something that feels better and is better. If you can replace your limiting belief with a better thought process, managing finances will become a little easier.

5. Cash May Be King — But Cash Flow is Queen

The king may be powerful but in chess it’s the queen that rules the roost.

When it comes to your business finances the old axiom might still be true — cash is king. But cash flow is queen. It’s more important every time.

Cash flow is the movement of cash. How you use cash far outweighs the amount of cash you have.

A business might have great top line revenue, but that doesn’t mean they’re taking home more profit.

In fact, this often happens as entrepreneurs start to see success. Expenses rise as quickly as (and sometimes it feels even faster than) revenue. The more we make, the more we spend.

No wonder so many hate business finances.

The key is to get cashflow under control.

6. There are Only 2 Types of Outflows

Cash flow may seem intimidating with everything that goes into it. If I start talking about cost of goods sold, gross profit, operating expenses, net income and more — most entrepreneurs feel like shrinking back.

Instead, I encourage you to simplify!

Once you hit real revenue there are only two types of outflows — those that benefit the owner and everything else.

What expenses actually benefit you and your business? If something doesn’t provide justifiable value, then minimize or get rid of it.

7. Let Your Accountant or Banker Do the Heavy Lifting

If you hate managing business finances, here’s some good news — you don’t have to do it all alone.

A banker or accountant is invaluable when it comes to some of the more complicated (but important) matters. When it comes time to assess creditworthiness or other business calculations, lean on their help.

If you manage your cash flow with a sensible methodology (profit first!), your accountant or banker will see the health of your business and will be willing and able to help with some of the specifics.

Plus, you’ll be sitting there healthy and happy, well-rested and confident in your profitability. Walk into your accountant’s office with that certainty, and you can bet the conversation will go well.

The more you get into Profit First, the more you’ll be able to understand what your banker and accountant are talking about. You don’t need to be at their level, but it will help if you understand their language. Then they won’t speak right over you. You’ll be able to trust them to make smart decisions while still feeling completely in control of your business.

8. Plan for Profit Distribution Day

Profit distribution comes each and every quarter. So let’s plan for it.

It’s important to be clear and held accountable for your profit and what you do with it.

Your cash flow strategy will help you know what profit you will see each quarter. Tell employees or family what you’re planning to do with your profit distribution.

9. Embrace the Profit First Methodology

I’ve been hinting at this one throughout this article, but if you really hate finances and want to grow your business, embrace the profit first method.

Profit First simplifies managing business finances through your cash flow statement.

This may sound simple, but many entrepreneurs (and many finance professionals) don’t understand a cash flow statement. Even fewer recognize its power to improve the health of your business.

By putting profit first and managing your cash flow accordingly, you guarantee that your business stays profitable. With this framework, you can take home more money doing what you love.

10. Partner With a Certified Profit First Professional

Profit First is an incredible tool. But if you want to maximize your profits (and minimize your stress) you need to know how to leverage it well.

That’s why I recommend partnering with a certified Profit First Professional.

This is important. People that practice Profit First are on a spectrum. Some have heard about the book. Others have read the first chapter. A few know it pretty well but haven’t really been trained.

And then there are certified professionals. The full Profit First certification isn’t easy — and it’s not supposed to be. It takes time and expertise. If someone is certified, you know they really get the Profit First concepts, implement them in their own businesses and know how to translate them into usable information for their client.

Finally there’s the advanced certification. I hold this certification, so I know the work it takes to get and the difference it makes. At the advanced stage, a professional can apply profit first across the board. They know how to use it in every area of your business to help manage the rest of the financial statements and get the entire business healthy.

With a Profit First Professional in your corner you don’t have to hate managing business finances, and you don’t have to manage them on your own. Instead, you can just enjoy a healthy business and max profits.