Many businesses were on a great trajectory leading into 2020. But then the pandemic hit and brought economic woes and operational challenges.
Now it’s 2021 and many businesses are looking to overcome the challenges they faced last year. The best way to start 2021 on the right track is through careful financial planning. This is the secret to wealth creation!
While you might be focused on increasing sales and attracting new customers, your business might have other opportunities to improve its financial standing.
The secret of wealth creation starts with optimizing the income you have and improving your operations. Here’s some accountant business advice on areas you should focus on in the new year.
Start by reviewing expenses
Your business expenses reduce your personal wealth. The more you spend on your business, the less profit and take home there is for you.
Sit down and take some time to review your 2020 ledger line-by-line. This work is tedious and time-consuming but can have big payoffs.
You might not realize some of the expenses you incurred last year. And most businesses just carry over those expenses into the following fiscal year. That habit can increase your operating expense year-over-year and harm your bottom line.
Look for operational improvements
Spend time with your directors, managers and other leaders within your business. Learn what they do on a day-to-day basis. Review each job role and look for free time these employees might have.
The more you know about how each aspect of your business is running, the better you can optimize those operations. When optimizing, you can look to optimize both people and processes on your way to leaner operations.
Look at every step from when a prospect shows interest to when you deliver the product or service. A good wealth creation program is lean and efficient to provide the business owner with reliable income.
Grow revenue and improve profit margins
Now that you’ve trimmed your expenses and optimized your operations, you’re ready to focus on growing revenue and improving profit margins.
Evaluate the profitability of various segments of your business. Once you know the most profitable areas of your business, focus your sales efforts there. It might be worth it to eliminate a product or service that is pulling resources from more profitable offerings.
Your goal is to keep everything you make. Step-by-step you can improve your profit margins through economies of scale until you reach your target. With these improvements, you’ll have more wealth to invest in your wealth creation financial planning.
We offer a free worksheet to help you evaluate your profitability and find money opportunities in your business. Download it now
Work with a business growth consultant
If you don’t have the time to do this process on your own, Yeager Sherburne CPA and Growth Consultants can assess your business. The best consultants know that your business growth is also your personal wealth growth.
When you work with our team, you’ll get a full plan for growing your business and how to build personal wealth creation. The fourth step in our process for growing small businesses is to increase your personal net worth.
Start 2021 off right with a conversation with one of our specialists. We’ll explain our process in more detail and discuss ways we can help you use your business for wealth creation. Contact us now.