Even the most savvy business owners need to call in reinforcement from time to time. Here are the times when your CPA should be the first person you call.
1. When you start making mistakes
Mistakes are costly — both in time and in money. If you find you’re making more and more mistakes in handling the finances of your business, it’s time to let a professional handle it. You’ll end up saving money in the long run.
If you want to be taken seriously, you need to put thought into what it will take for your idea to actually be a successful business. You need a plan.
A business plan is a document where you outline your concept and strategy for success. It provides an overview of your potential company – what it will do, how it will generate revenue, what expenses it will incur, and who will be involved in running it.
Here are a few reasons why you should write a business plan:
Cash is the lifeblood of the business. Without it, you can’t pay bills, you can’t expand the business and you can’t pay employees. Most importantly as the business owner, you can’t even pay yourself!
Your business can show the most fantastic performance according to the income statement, with huge profits and yet have nothing left in the bank. In this situation your business would not survive. How could this occur? It could occur if you are not monitoring the cash flows of your business.
Is your business profitable? If you’re pointing enthusiastically to the balance in your bank account, and nodding your head “Yes,” you may be in for a big surprise. The fact of the matter is that cash in your account doesn’t necessarily translate into profit in your pocket. Why? Because the money you have on hand today doesn’t always reflect the payments coming due