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Financial, Profitability

Planning for Profitability in the New Year

As a business owner, sometimes it’s tough to know where to turn your attention. Many aspects of your business demand it – people, products, processes and profit. As we prepare to enter a new year, what should you focus on first? The element that keeps it all going – PROFIT!

Often, business owners don’t have a clear understanding of their financials, yet as the primary decision maker for the company, financial statements can help you understand how to become more profitable. Here are some top reasons to pay attention to your financial statements:

  • Your financial status affects every aspect of your business – avoid unwanted surprises!
  • You need to know whether you are on track for tax time and make adjustments along the way as needed.
  • Accurate cash flow forecasting and management is dependent on understanding your financials. 
  • Keen interpretation of your financials is the foundation for the creation of a profit plan.
  • Treasures may be hidden in those documents that would enable you to borrow less, invest in new equipment, or hire additional staff.

It should go without saying that accurate books are essential to giving you the data you need to keep tabs on the numbers.  The Minerva Group can help by cleaning up your books and showing you how to navigate your way through your financial documents.

We are experts at helping business owners get a handle on their financial statements so that they can build a profit plan that gets results. We do this by performing an in-depth financial assessment of the health of your company, using your past financials as our guide or creating financial statements based on your books.

We also help in a variety of roles – from keeping your books clean and up to date and preparing and filing your taxes, to developing and implementing a detailed, strategic blueprint for growth. We take it a step further by acting as your accountability partner, helping you achieve your profit plan for the company.   

We’d welcome the opportunity to connect with you and help you get a handle on your financials. Contact us today to learn more.

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Financial

It’s Q4! Do You Know Your Way Around Your Financial Statements?

A new year is just around the corner. Be prepared by assessing your company’s financial health and readiness for 2020.

Your financial statements are the indicators of your business’ financial health and enable you to track your progress, identify deficiencies, and make adjustments if needed. But business owners often don’t know exactly what to look for, or where. Take time now to learn your way around the three primary financial reports that provide you with the information you need to stay on top of your company’s financial status. 

Balance sheet

The balance sheet gives you a snapshot of your financial position at a specific moment in time. Assets equal liabilities and equity, so the balance sheet is a good test of whether your numbers actually add up. The balance sheet is also a tool for calculating net worth – subtract total liabilities from total assets. And it allows you to assess two key performance indicators.

  • Debt – By dividing total debt by total assets, you’ll see what percentage of your assets is funded by debt. Then you can evaluate whether you need to make changes. How effective are you at managing your debt? Do you owe more than you can comfortably repay? Should you modify your spending practices, find ways to cut costs, or develop some debt reduction strategies?
  • Liquidity – Your assets may be in many forms – from cash on hand to real estate holdings. Review your assets – which should all be listed on your balance sheet – and determine how quickly those assets can be bought or sold. You may have plentiful assets but cash may be scarce. It may be necessary to consider a different mix of assets to ensure that you have sufficient liquid assets to cover your short-term cash requirements.

Income Statement

The income statement illustrates revenue versus expenses during a specified time period. With this information you can calculate critical numbers like gross profit, operating income, and net income. Net income is, of course, a major indicator of your business’s profitability and financial health. It is the amount your company is left with after paying off expenses.

The income statement can help you analyze your bottom line. Compare your earnings to sales forecasts and your expenditures to budget.   

Cash flow statement

The cash flow statement illustrates how your business moves money around – where cash is coming in and where it’s being spent. Tracking operating, financing, and investing activities, it’s a great tool to help you manage finances and make informed business decisions.

Positive cash flow equates to having funds to reinvest in your business and is an indicator of good financial health. If you have cash remaining after buying, maintaining, or improving fixed assets, you have what is referred to as “free cash flow” which signals that you’re positioned well for growth.  

What’s Next?

Once you’re able to navigate and interpret your primary financial statements, you’re equipped to assess where you stand this year compared to your projections from last year, and to prepare next year’s budget. If your numbers aren’t adding up as expected, determine whether you need to readjust your spending. If your financial status is positive, consider where and how you can best reinvest in your business.

If you’ve had difficulty assessing the numbers you need or your financial statements are not up to date, consider reorganizing your accounting processes, upgrading your financial software, and getting a professional assessment of your financial situation. Contact The Minerva Group for a review of your financial statements and procedures. We’re equipped to not only help you clean up your books and streamline your accounting methods, but to position your company for growth and drive your business forward in 2020.    

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Financial

A 360-Degree Approach to Financial Spring Cleaning

Tax season is behind us! What was your experience? Did you have everything you needed at your fingertips or were you scrambling to pull documents and records together?

The process of filing your taxes likely brought to light issues that exist with your financial records, and more importantly, your strategies and practices. Now is a great time to invest in some financial spring cleaning. Start by asking yourself the following:

  • Were your high-level financial documents accurate and in balance for 2018?
  • What is your current state of cash flow and do you have a cash-flow forecast?
  • Do you have both short and long-term financial goals and a strategy to reach them?
  • Are your financial goals aligned with your company’s vision and mission?
  • Do you have Key Performance Indicators in place? If so, are they being monitored regularly and acted upon?

If your financials are lacking in any respect, many areas of your business can be negatively impacted including profitability and growth. Perhaps you need to do a 180 where your financials are concerned. If so, look at it from a 360-degree perspective.  

The Minerva 360 BlueprintTMwas created with the business owner’s comprehensive success as its objective. It’s all about keeping your business momentum going…and growing! It begins with a “discovery process” during which your company’s most urgent needs, as they relate to your overall financial picture, are identified. We help the owner gain a comprehensive understanding of their financial position, develop a clear vision for where and how the company can grow, and provide specific tools for addressing various financial elements.

We can take it a step farther by helping business owners understand how their leadership style affects what is working and not working in the business. We do this through Minerva’s Energy Leadership Index (ELI) which helps you tap into your goals and motivations, and then provides you with customized tools to guide you in your unique decision-making processes. We then deliver customized financial and leadership strategies and methods that are essential for taking your company to the next level. Our support continues in a variety of roles – from keeping your books clean and up to date, to developing and implementing a detailed “blueprint” for growth and acting as an accountability partner to help you achieve your vision.   

It’s easy to get started. Take the Minerva 360 BlueprintTM Quiz at www.360blueprint.info. You’ll receive a personalized assessment, recommendations, and the opportunity for a complimentary follow-up phone call to dive into your results in even greater detail. To learn more, visit http://www.theminervagrp.com/ or contact us.

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Entrepreneurship, KPIs

Launching Your Business with Eyes Wide Open

Launching your own business can be a thrilling adventure, bringing your passions, talents and skill sets together with the vision of doing something great. One of the keys to building a successful business is looking at it from all angles and starting with a plan. A critical component of that plan is the numbers, and many new business owners would rather look at the exciting parts of entrepreneurship (freedom, ability to pursue their passion, making boat-loads of money for themselves and not someone else) instead of diving in and really knowing their numbers.

That’s where we come in. Here’s how The Minerva Group helped one solopreneur launch her dream business.

When we first met our client, Sue, she was working full time for a large tech company. To them she was just a number, and she went to work every day feeling unmotivated and underutilized.

Her passion was photography. On weekends she photographed weddings and loved the interaction with people and producing something that would be meaningful and lasting to them. Her dream was to do this full time, but she didn’t know where to start. The Minerva Group partnered with Sue to provide her with the tools and know-how to help her make that dream a reality.

First, we helped her get a clear picture of her current financial situation by looking at the books she had kept for her photography side-gig. This enabled us to:

  • project the income she needed to transition into her own business,
  • set expectations for the return on investment,
  • establish goals for building her savings, and
  • plan the timing.

Armed with real numbers, Sue could finally see clearly that she could make her dream happen.

Next, we looked at strategies to move Sue towards full time. These included attending bridal shows to meet wedding planners and make herself and her services known within the wedding industry. This networking provided sources of referrals from which she was able to branch out and build her clientele. We recommended a substantial increase in her prices, helped her identify unique venues for her work beyond the ones she had traditionally used, and helped her expand her offerings to clients by adding videography.

Within the space of two years – and with a lot of hard work – she moved into her business full time and has never looked back. From January through September the previous year to the same period over the current year, she experienced growth at a rate of 132%! The demand for Sue’s business has grown to the point that she now employs several additional photographers.

The Minerva Group helps business owners take a 360-degree look at their business, starting with the numbers and then building out a realistic strategy for growth. Do you have a passion for building a business? Take our online assessment, the Minerva 360 Blueprint® and get a clearer understanding of your own  picture so you can take the right actions towards growth.

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