[g_petko]

Hey ladies and gents,

We've got people from all walks of life on this forum so I thought I would see if I could pick the brains of a few of you.

I'm going to be starting my first business this year ( which I am proud of ). Now while I will be having an accountant/bookkeeper make sure my financials and paperwork is in order - I have been doing some reading online to get a basic understanding of finances involved when owning a business (i.e. cost, revenue, gross margin, payroll, taxes, operating expenses, net profit). I believe as an owner you need to make sure you know how your financials are looking (I'm shocked how many operators I've seen who 'leave it all to the accountant')

From your own experiences, as an owner/investor, what should I make sure I keep an eye on (everything isn't an answer), tips you could share on how you all keep things updated, identifying potential problems.

Any input or wisdom you all pass on is greatly appreciated.

Thanks in advance

[bimmette]

Trust no one. Learn as much as you can, because nobody will care about your business as much as you do.
Document everything. And keep back-ups!
Oh and congrats!

[Woodengun]

I'll go counter to bimmette.

Forge good relationships at all levels of your businness. Your investors/partners. Your employees. Your customers. Yourself (don't lie to yourself....that $90k car purchase as a business expense when your just starting to break even is NOT a good expense....yet).

what kind of business? Real estate investment is vastly different than a convenience store which also completely different than opening a medical practice....

[Nkc]

Originally Posted by Woodengun

I'll go counter to bimmette.

Forge good relationships at all levels of your businness. Your investors/partners. Your employees. Your customers. Yourself (don't lie to yourself....that $90k car purchase as a business expense when your just starting to break even is NOT a good expense....yet).

what kind of business? Real estate investment is vastly different than a convenience store which also completely different than opening a medical practice....

I'll go counter Woodengun and say trust no one as the lady said especially when it comes to finances. Be sure to know where each penny goes so you won't overspend. Know your financials in and out. Know how accounting works and do your own books for the first couple years.

[Woodengun]

You have to trust your accountant. Unless you want to do the accounting yourself. That doesn't mean give them (or anyone else) a blank check to do whatever they want.

If you run a good business you have to trust a lot of people. You cannot do everything unless you are running one of those fruit/vege stands under a pop-up tent on the side of the road.

Trusting others to do their job/role doesnt mean you dont need to know what they are doing. It means when you look at your financials you are aware of what goes into that p/l sheet and make sure thr numbers look good.

If you own a restaurant, you need to look at your food costs and make sure it is reasonable. But unless you are the chef you shouldn't be deciding how many heads of lettuce to order because you don't trust your chef to know.

If you own an auto shop are you going to look over the shoulder of every mechanic...go in every test drive, talk to every customer, receive every package, answer every call, sweep up every evening, clean the toilet every night because you cant trust anyone else?

Trust others to do their jobs...if you dont dont work with them. Know what every job/role does and understand them so you can assess if someone is trustworthy or not.

[P1]

Originally Posted by bimmette

Trust no one. Learn as much as you can, because nobody will care about your business as much as you do.
Document everything. And keep back-ups!
Oh and congrats!

"Trust no one?" Sounds like one of those Instagram quotes... <sigh>

I suggest you read this book by Stephen Covey called "The Speed of Trust".

"In this powerful audio book, Stephen M.R. Covey articulates why trust has become the key leadership competency of the new global economy. Covey convincingly makes the case that trust is a measurable accelerator to performance and that when trust goes up, speed also goes up while cost comes down, producing what Covey calls a "trust dividend." Covey reveals the 13 Behaviors common to high-trust leaders throughout the world and demonstrates actionable insights that will enable you to shift your behavior to increase trust in all your relationships. Like a ripple in the pond, The Speed of Trust begins within each of us personally, continues into our relationships, expands into our organizations, and ultimately encompasses our global society."

[bimmette]

Originally Posted by P1et

"Trust no one?" Sounds like an Instagram meme... &lt;sigh>

But if you're serious, then I'll tell you that I cannot do my job if I cannot trust everyone I work with, including my customers.

Haha, ok geez, I trust some people!!! Just use your gut and also check out the background of people before you hire them.
I've seen a lot of internal fraud so just be cautious.

[blackboxing]

Lol, "trust no one". Advice like this usually comes from the non-successful/very small business owners.

[P1]

Originally Posted by blackboxing

Lol, "trust no one". Advice like this usually comes from the non-successful/very small business owners.

"Trust no one" is a #yolo term, used by the Instagram and the Tumblr crowd. And you're right, essentially the unsuccessful.

[Nkc]

We talking about in a general term of doing business or just the finance part?

[bimmette]

Originally Posted by blackboxing

Lol, "trust no one". Advice like this usually comes from the non-successful/very small business owners.

Originally Posted by P1et

"Trust no one" is a #yolo term, used by the Instagram and the Tumblr crowd. And you're right, essentially the unsuccessful.

Haha, I am not on Instagram or Tumblr, nor am I unsuccessful. I was speaking in simplistic terms, people. Just be careful who you trust with your financials, ok?

[kevinbahnz]

Document everything and keep back ups.

[Mr Tonka]

Originally Posted by Woodengun

I'll go counter to bimmette.

Forge good relationships at all levels of your businness. Your investors/partners. Your employees. Your customers. Yourself (don't lie to yourself....that $90k car purchase as a business expense when your just starting to break even is NOT a good expense....yet).

what kind of business? Real estate investment is vastly different than a convenience store which also completely different than opening a medical practice....

This.

[gtron]

give her some credit, look at the sarbanes-oxley act. that didn't have anything to do with small business.

[MrRoboto]

One piece of advice...bill your clients on time! Nothing I hate more then receiving invoices from subcontractors months past the date work has been complete.

Also, invest in accounting/invoicing software such as Freshbooks.com. It will help you and/or staff to organize expenses, projects, billing, track cashflow, etc.

[roastbeef]

buy the audiobook by Brian Tracy titled "how leaders lead." its a great book about running a business.

[FC4]

Work hard, play hard. Whether you think you can or you think you can't, you're probably right. Everything happens for a reason. Good things happen to those who wait. As one door closes, another door must open.

[FC4]

But on a serious note, when you're meeting with angels or VCs, don't wear a suit. It indicates that what you have to say is not important enough.

[NEFARIOUS]

First business I owned:
1. Don't trust your friend because you started the company with your friend. He's on his 8th out of 25 years of being in Federal Prison.
2. If you're making more money than what you should be earning/profiting, be wary and expect the FBI to knock on your door, then drain your life savings hiring lawyers trying to prove your innocence (see #1).

2nd business:
1. Just because your community is the majority, doesn't mean that you should focus all your energy into it.
2. Asians are frickin' cheapskates when it comes to computer repair (heck, I'm Asian so I can say it... My business went belly up as soon as I stopped getting West LA/Bev Hills clientele and focused on the San Gabriel Valley, and they kept pointing back to a tiny ad for someone that reinstalls computers with pirated WinXP for $5 when I actually go and solve the problem with certified software)

[ASBSECU E93]

Originally Posted by Woodengun

I'll go counter to bimmette.

Forge good relationships at all levels of your businness. Your investors/partners. Your employees. Your customers. Yourself (don't lie to yourself....that $90k car purchase as a business expense when your just starting to break even is NOT a good expense....yet).

what kind of business? Real estate investment is vastly different than a convenience store which also completely different than opening a medical practice....

^ This. Before anyone can offer any meaningful feedback, It may help to better understand what sector of business you are considering...Medical, CRE, Manufacturing, C-Store, C&I, etc...

[g_petko]

Originally Posted by bimmette

Trust no one. Learn as much as you can, because nobody will care about your business as much as you do.
Document everything. And keep back-ups!
Oh and congrats!

Unfortunately this is quite common where I've moved to (a lot of sly people) so I have to have eyes and ears open at all times :/

Thanks for the input, I appreciate it

[g_petko]

Originally Posted by Woodengun

You have to trust your accountant. Unless you want to do the accounting yourself. That doesn't mean give them (or anyone else) a blank check to do whatever they want.

If you run a good business you have to trust a lot of people. You cannot do everything unless you are running one of those fruit/vege stands under a pop-up tent on the side of the road.

Trusting others to do their job/role doesnt mean you dont need to know what they are doing. It means when you look at your financials you are aware of what goes into that p/l sheet and make sure thr numbers look good.

If you own a restaurant, you need to look at your food costs and make sure it is reasonable. But unless you are the chef you shouldn't be deciding how many heads of lettuce to order because you don't trust your chef to know.

If you own an auto shop are you going to look over the shoulder of every mechanic...go in every test drive, talk to every customer, receive every package, answer every call, sweep up every evening, clean the toilet every night because you cant trust anyone else?

Trust others to do their jobs...if you dont dont work with them. Know what every job/role does and understand them so you can assess if someone is trustworthy or not.

Sound advice, sometimes people do try and input themselves into roles that the do not understand! Fail is around the corner in that situation unless you have a good, honest group around you