Entrepreneurs never struggle with a short list of to-dos: the responsibilities of a business owner are immense. Most do their best to avoid focusing too much on small details, but may end up ignoring important aspects of the business, especially when it comes to the organization’s finances.
Typically, homeowners focus on driving the growth of their business by finding new customers and bringing together the equipment and technology they need to manage and service that growth. This makes sense, as the main concern for small businesses in the US (many have happened during the pandemic) continues to generate enough revenue.
Beyond these immediate pressures, business owners often don’t take the time to think about changing their business practices unless the results directly affect customers or increase ROI. However, prioritizing long-term projects can significantly improve business health and shape the business for a more financially sound future.
In my experience, these are the three financial tasks that are often buried under the most demanding outstanding tasks, but which can drastically improve your business in the long run:
1. Review all service providers
It is easy to fall into the trap of choosing service providers and maintaining the status quo, even when the services do not suit the needs of your business. Reconsidering providers, such as health brokers, bankers, payroll systems, CPAs, and 401 (k) advisors, can save you money, better service, and specializations that fit your current business location. .
A good rule of thumb is to review a service provider every year. Get recommendations from people you trust and think beyond the biggest and most famous provider. The largest provider of any space is often not the most suitable for new or small businesses. Larger vendors are often created to serve large companies that have specific teams with experience in each area.
Often, the best suppliers for small businesses are those who work with companies like yours. They may be used to working with a company that does not have separate payroll, human resources, finance, or profit teams. They will treat you like a List A customer and give your business the time and attention it deserves.
2. Update the business growth plan
Growth is survival for a company, but many entrepreneurs see it as an additional activity. Your business growth plan is to look at the future of your business, even beyond your involvement. Solid growth allows you to sell the business for more money one day; represents a key component of exit planning for business owners.
Growth planning naturally begins by adding elements and tools to your business. But focusing on aspects of your business that you can eliminate or delegate is also valuable. Ask yourself: What do you do for clients who ask for your time and energy but don’t seem to value it? Could you delete these tasks? Are there any tasks you could delegate or outsource, for example, can your CPA help you manage your payroll? Can you hire a group to take over your digital marketing?
Eighty percent of small businesses expect to outsource at least some business work this year. Outsourcing these smaller tasks can help you focus on your own business and save space at the top of your to-do list for larger goals.
3. Take time for personal wealth planning
Many business owners have the idea of retiring at a certain age, but often do not spend time reviewing their personal wealth planning or the details of their exit plans. The big question is, how much should your business sell, or how much do you need to grow so that you can retire and continue living your life the way you want?
As long as you care about your employees, income, technology challenges, and the pandemic, you will be forgiven for forgetting your own needs. Four-fifths of business owners have no written transition plans. This can leave the company in a state of confusion when it is finally time for the transition.
Business exit planning does not mean looking for exit now. It means setting a plan for how you will value your business and how you will set up your team when it comes time to sell or retire. Prepare your customers, community and employees for a successful transition. Don’t postpone planning just to find out that your buyer wants you to be a consultant for three years when you want to be on the beach.
The responsibilities of a business owner are often overwhelming, but if you outsource smaller tasks, review your vendors, and prioritize activities that drive business growth, you can help your business thrive even when the workday is hectic.
Contributed by Matt Baisden (CFA, QKA), a retirement plan advisor for Plancorp, a full-service wealth management company that serves businesses and families in 44 U.S. states and manages more than $ 5.5 billion in U.S. assets. clients. Matt’s team specializes in 401 (k) s for businesses, manages U.S. Department of Labor testing problems, resolves service provider errors, compares rates, and designs profit sharing to maximize profits. employee key for customers.