Finance Tips for Small Business Owners

Finances can be hard to keep track of for anyone, but good finance skills are key to the success of small businesses. Doing your own businesses finances doesn’t have to be hard, and with the right management can help your business thrive. 

1. Keep business and personal finances separate.

Avoid confusion and the headache of separating your finances down the road and open up a bank account specifically for your business. This will help you keep track of spending and all the accounting behind your business and you’ll avoid mixing personal expenditures with business spending. 

2. Also, pay yourself. 

You’re arguably the most integral part of your own business and should be compensated as such. Even if it’s just a small percentage of profits or the monthly budget, it’s important to pay yourself to keep your personal finances in check and to test the profitability of the business. 

3. Look to the future.

Even when money is tight at first, it’s important to remember that one day extra help can make a difference in whether your business takes it to the next level or continues to stay at the same place. Other people’s skills can bring new things to the table that you may not possess. Whether it’s hiring an extra server to improve speed of service or a creative director to give your brand a facelift, these things are worth investing in.

4. Stay on top of your bills. 

Keeping track of your invoices and debts that are owed to you is essential to your business’s ROI, but often can fall along the wayside. Designate a spreadsheet to keep track of accounts receivable. Keeping track of money owed is the first step. If you begin to notice that your clients or customers are constantly behind on payments, offer an incentive for early payments such as a 5% off their bill. 

5. Having a good billing strategy.

Paying bills on time ranks highly in importance for your business spending, and if you find yourself falling behind or mixing up dates, utilize a strategy that works for you to stay on top things. Whether it’s a virtual or physical calendar, alerts or autopay, paying bills on time is essential. 

6. Look at your ROI.

Keeping a close eye on ROI for each expenditure helps you make the best business moves in the future so you can know what investments and expenditures are profitable and unnecessary. 

7. Plan ahead.
This may seem like a no brainer, but it’s important to run the numbers of daily, weekly, and monthly recurring expenses so you know exactly how much you will need to make and invest to stay afloat. Take into account steady expenses like rent and employee pay and also unexpected curveballs too.

8. Don’t forget about insurance.
As previously mentioned, you never know what curveballs may be thrown at your business, and although it can be a pain to pay for insurance, especially when first starting out, it can be a life saver in the end. Although it might not be fiscally possible to be insured in your business’s first few months or year, it’s worth investing in when the time’s right.

9. Prioritize what makes the most money first.

Running and starting a business comes with a lot of responsibility, but the number one thing to prioritize is focusing on what is going to make your business the most money. If you find that you’re struggling to find the balance of focusing on your product or service and neglecting other aspects that boost business like marketing, upkeep, or social media, it might be time to hire help to reach your long term goals.

10. Plan for slow months.

The best way to account for months when your sales are down is by setting aside an emergency fund when your cash flow is up. Setting up a business savings account is a simple way to put away money regularly for when something comes up.

11. Invest in high-quality accounting software.

Investing in the proper accounting software makes it much easier to keep track of all your spending and profits. Investing in the proper software not only helps you keep track of your finances, but also saves you the expense of hiring an accountant.

12. Know when it’s time to turn to loans and research which one is the right type to suit your needs.

Do your research on loan options and providers to see what will fit your business’s needs best to begin with. Although it may seem counterintuitive, applying for and being granted a loan while your finances are in good shape can be a good strategy instead of waiting until you’re in serious trouble.

13. Price yourself correctly.

Both under and overpricing your product or services can be detrimental to your business. Do your research on competitors’ prices and factor in where your business fits in accordingly.

14. Don’t be afraid to reach out for help.

Finally and most importantly, sometimes we don’t always have it all figured out. Reach out for help when you’re struggling with a certain aspect of your business— whether it’s financial tracking or social media. Your friends, family and colleagues are all rooting for you and your small business to succeed and may have a bit of advice or guidance to pass along to you for help.

 

We are here to help you navigate so schedule a call to discuss your specific business goals

Why Operational Resilience is Vital for Financial Services

In light of increasingly sophisticated cyber attacks, technology advancements, more complex ecosystems and impending regulations, firms should be prepared for unexpected disruptions and strive to protect their stakeholders and their businesses. They can do so by developing operational resilience.

Operational resilience means being able to protect systems that support business services and quickly rebound in the face of threats and disruptions. Financial services firms that want to build financial resilience should improve their operational resilience as well. In fact, their financial resilience depends on it.

“Operational resilience refers to the ability of firms, FMIs and the sector as a whole to prevent, respond to, recover and learn from operational disruptions.”—

Why is operational resilience important for financial services firms?

First and foremost, there are strong signs of impending regulations that would require firms to become operationally resilient across the enterprise as a whole. Under existing legislation, firms are already responsible to their customers, shareholders and the overall economy in terms of cybersecurity, risk management and outsourcing.

The Bank of England and the European Banking Authority have both issued discussion papers on the topic and working towards introducing legislation that aims to improve resilience across the industry in a holistic way. Across the globe other regulators are expected to follow suit. Regulators are reviewing three key areas:

  • The growing interconnectedness between financial services institutions and third-party providers.
  • The increasing sophistication in cyber attacks on individual financial services institutions and entire markets.
  • The dependence on an increasingly concentrated group of providers.

Additional regulations should also require evidence of firms’ resilience. Firms that fail to comply may have to absorb significant financial losses caused by large disruption events, such as a major security breach.

A second factor contributing to a strengthening of operational resilience is the current industry environment. The pace of change and pressure to more quickly meet shifting customer expectations combined with increasingly complex ecosystems increases firms’ risk of service outages and security breaches. The quality data that is so key to enterprise competitiveness is now vulnerable to increasing cyber attacks and breaches and thus more likely to be compromised, putting customers and the firms that serve them at great risk. Disaster recovery becomes paramount.

Finally, financial services institutions are increasingly vulnerable to an escalating number of security attacks. A 2018 State of Cyber Resilience study across 19 industries and 15 countries found that the number of cyber attacks on surveyed firms doubled in 2018. One in seven attacks on banking and capital markets firms were successful.1 One in five attacks on insurers were successful.2 These attacks are often difficult to identify, so considerable damage can be done in a short amount of time. Due to social media, word about a breach can spread quickly, affecting a firm’s reputation and, potentially, its bottom line.

A two-fold approach to current challenges

Implementing operational resilience requires firms to plan for and mitigate these threats while at the same time complying with new regulations and protecting their financial foundation. In my next blog post, I’ll share a framework for implementing resilience, not only operationally but across the entire enterprise, and highlight some common roadblocks leaders should be aware of.

 

*We are here to help you navigate so schedule a call to discuss your specific business goals

Workforce 2025: Financial Services skills and roles

 

FEBRUARY 16, 2019 RESEARCH REPORT

In brief

  • Seven to 10 percent of tasks in the financial services workforce could be automated by 2025, while 43-48 percent could be augmented with technology.
  • Resulting cost savings and productivity gains could deliver up to $140 billion of cumulative value for the North American industry.
  • Organizations must take a strategic approach to augmentation and automation to emerge as the winners from this time of change and innovation.

The adaptive financial services workforce of tomorrow

The worlds of work and of financial services are changing at high speed. Consumer expectations are rising as financial services companies face growing competition from digital startups and technology companies that are setting new benchmarks for customer and workforce experiences. At the same time, a new generation is entering the workforce, bringing with it new demands of the workplace and new ways of thinking and collaborating.

From big data to the Internet of Things to intelligent automation, the pace of technology change, too, is accelerating. Disruptive technologies that automate mundane tasks and processes, or that augment human expertise, creativity and skill with real-time information and new capabilities will completely change the shape of the financial services workforce over the next five to 10 years.

Accenture economic value modelling estimates that Seven to 10 percent of tasks in the financial services workforce could be automated by 2025, while 43-48 percent could be augmented with technology. The resulting cost savings and productivity gains could deliver between $87 billion and $140 billion of cumulative value for the North American financial services industry between 2018 and 2025.

Despite the size of this opportunity, automation projects at many banks, insurance carriers and capital market firms are small-scale, tactical and siloed by nature, practices that dilute full value capture.The cost-savings financial services companies could reap from higher levels of automation are not insignificant. However, they can unleash the most value by focusing on the things that AI and humans do best together, to drive large productivity gains.

Unlocking the new financial services workforce

If financial services organizations are to unlock the value proposition of the new workforce and the next wave of digital technologies, they need to take a top-down, cross-functional view of the roles and functions in the enterprise to understand where they can drive the most value. Then they need to focus strategically on the roles that are best suited to being reinvented through the application of automation, and that offer the most potential for rapid and sustainable return on investment.

Finally, they should have a point of view on what to do with the capacity released through automation, consistent with the values of the organization. How financial services business leaders respond to the challenges and opportunities of a changing social, economic and technology landscape today will determine their readiness to compete in a different world tomorrow.

Unlocking up to $140 billion of industry value

Productivity gains from augmentation could deliver $72-117 billion in value to the North American financial services industry between 2018 and 2025, while cost-savings from automation could total $15-23 billion.

Projecting cost-savings and productivity gains through automation and augmentation for the North American financial services sector, 2018-2025

 

*We are here to help you navigate so schedule a call to discuss your specific business goals