Putting together a business plan isn’t something you do overnight, so it can feel unnecessary when you’re trying to get your business off the ground. As you get into the weeds with your business, however, your business plan becomes a compass for growth and sustainability.
Here’s a story from one of our clients about how a business plan + the right accounting apps created a recipe for strong, sustainable growth.
A growing start-up without a plan
One of our clients came in as a successful, growing start-up that needed some help with better organization for their accounting. As we began to dig into the company’s books, we realized that they needed more help than basic bookkeeping. The company lacked a formal structure for measuring and planning growth. The founder thought his company was growing because he was making good money, but growth is rarely clear cut.
We stepped back from the books and talked with the founder about his goals for the company. Where did he want to be in a year, and what did he need to do to realize that vision? Once those goals became clear, we recommended some relatively small changes that could help bring big results. One was a merchant service to allow the business to accept credit cards for payment instead of waiting for customers to send in checks, and also to get better statistics on what was selling across various markets. Then, we created a new chart of accounts, allowing the founder to have a functional understanding of what was driving sales and costs.
Our next steps were to put some accounting apps into place to help with efficiency and accurate bookkeeping. Cloud accounting has many benefits for businesses, and for this client, the real-time insights into business performance were huge. The owner uncovered an entirely new revenue source for his business and was able to transform those insights into fuel for growth.
Digging in to long-term business growth
You have to spend money to make money, and that was an important lesson for this founder. The company’s profits were increasing incrementally year over year, but it turned out that was because they were cutting costs. When they lost a big account, it had an outsized impact on their cash flow. When we looked at the complete picture of their financials, the company was actually stagnant. By creating a strong, long-term business plan, the founder was able to make strategic investments in staff and software that will allow the company to truly grow in the long run.
We’ve helped a number of clients put together formal, goal-oriented business plans. If you’re just getting started, Xero’s blog has a great description of what goes into a business plan and how to write one: How to create the perfect business plan in 10 steps.
Apps help businesses work smarter and be prepared
When it comes to business technology, the huge array of options can be overwhelming, especially at the beginning. It’s worth investing in a few basic tools to help you with efficiency, data management, and staying on top of your books. Here are four accounting apps we recommend to all new businesses:
- Xero: Your cloud accounting hub, pulling together information from disparate sources and ensuring you can run your business from anywhere. The other apps below integrate with Xero, allowing you to avoid entering information into multiple platforms.
- Bill.com: Approve and pay your bills on time, streamlining your accounts payable and accounts receivable.
- Expensify: Keeps track of all your business expenses, receipts, and reimbursements in one easy place. Who doesn’t love automating a tedious process?
- Gusto: If you have employees, Gusto tames the chaos of payroll, benefits, and HR.
Working together, these apps give you all the basics to set up and run your business accounting function.
Yes, you really do need a business plan.
The risks are too great to run a business without an understanding of what success looks like and how you’ll achieve it. We’re passionate about helping founders create a plan, put the right tools in place, and grow a business. Need help with yours? Contact us today for a consultation.