Managing a small business can feel like balancing countless tasks at once. In the midst of it all, one key metric stands out – Gross Profit Margin. But what is Gross Profit Margin, and why does it matter for small business owners? Let’s look at how to calculate it, why it matters, and how you can use it to unlock your business’s full potential. What is Gross Profit Margin? At… Read more
What is a Three-Way Budget? A Three-Way Budget is a comprehensive financial planning tool that integrates three critical financial statements: the profit and loss statement, the cash flow statement, and the balance sheet. This budgeting approach allows business owners to project their financial performance and make informed decisions to ensure profitability and sustainability. The profit and loss statement, also known as the income statement, provides an overview of the business’s… Read more
Often in business, the focus is on increasing sales to boost profit. However, there are other ways to enhance profit without acquiring new clients or making extra sales. Improvements can always be made at the margin. Enhancing your systems and processes can significantly impact the bottom line. Here are 11 strategies to improve your profit: 1. Negotiate Better Prices with Your Suppliers Look along your entire value chain for opportunities… Read more
When it comes to running a thriving business, understanding and effectively managing your working capital is crucial. Essentially, working capital is the cash readily available for the day-to-day running of operations. The more protracted the business cycle, the higher the working capital requirement tends to be. Your goal? To ensure you have enough working capital on hand to cover operational expenses, with a reasonable buffer in place. How to improve… Read more
Financial Statements Showdown: Understanding financial statements might seem intimidating, but mastering them is essential for small business owners who want to stay ahead. Think of your financial reports as a “Financial Statements Showdown,” where each statement reveals unique and crucial insights into different aspects of your business’s health. This guide breaks it all down, making it easier for you to make confident, informed decisions and guide your business toward lasting… Read more
Want to avoid paying more than you should come tax time? Or a frantic last minute search for missing financial records? New business owners have a lot on their plate, and can easily lose track of an approaching tax deadline or financial data needed to submit their return. Organization is key when preparing for tax time. As is taking advantage of the many tools and resources out there to support… Read more
Most small business owners who use accounting software quickly master the basics. They automate processes like invoicing and payroll, track expenses and view real time financial reports to manage cash flow and make better business decisions. But what many business owners don’t take advantage of are key insights that can improve customer care and increase sales. Here are some smart ways you can use your accounting software to help boost… Read more
Every business can benefit from dedicated financial management expertise, but very few small businesses have the means to hire someone full time—particularly in the lean early years. Unfortunately, it’s those first few years when a company is just starting up that establishing good habits with managing financial resources is so important, and, over time can even make or break a business. Hiring a virtual CFO is an affordable option for… Read more