Nowadays, the Internet has lowered the entry barriers and opened business opportunities for so many business owners. Thus, in this Expert Insight Interview, Parker Stevenson discusses the mistakes that owners of small online businesses make with their finances. Parker Stevenson is a Co-Owner and Chief Business Officer at Evolved Finance, a bookkeeping and business education company, for online business owners to become profitable.
The interview discusses:
- Understanding and paying attention to the numbers
- Small businesses’ vulnerability
- Advice for people thinking about opening their own business
Know and Understand Your Numbers
The main mistake people make is not paying attention to the numbers. They only know that they will have taxes to pay at the end of the year, but even that is a problem that an accountant can fix. Or, they look at the merged accounts, and they see that there is money coming in, which has to mean that they have money. But, what about the money that is going out? Since many online business owners are consultants, bloggers, coaches, etc., who probably won’t be able to sell their business later, is it is crucial to find a system that will make the profits now.
Another common mistake is to intermingle between personal and business accounts. These two need to be separated. Many people do not know these things because they never had to deal with this type of responsibility, and that is why it is helpful to get professional help as early as possible, such as a bookkeeper and accountant. These professionals can help you to understand your finances better.
Marketing and sales are the parts that online business owners focus on the most, but as revenue starts to increase, managing cash flow becomes vital as well. Small businesses usually struggle more with cash flow because sometimes it takes more than 30 days to receive money, leaving the cash inflows vulnerable compared to cash outflows. Smaller businesses are more at risk. So, investing in a financial professional to help you understand and plan your finances is for the overall well-being of your business.
Some of the reasons that limit us in opening our own business are self-doubting and thinking that other people know more than us. But the truth is, they also just figure out things as they go. Thus, we have to overcome the imposter syndrome, do the things we want to, make mistakes, learn quickly from them, and continue to go forward. The only recipe for success is to stay focused on the plan and not to quit when things get hard.
John is the Amazon bestselling author of Winning the Battle for Sales: Lessons on Closing Every Deal from the World’s Greatest Military Victories and Social Upheaval: How to Win at Social Selling. A globally acknowledged Sales & Marketing thought leader, speaker, and strategist. He is CSMO at Pipeliner CRM. In his spare time, John is an avid Martial Artist.