Tricia Taitt wants to help 10,000 women earn a million dollars in the next 5 years. 

“As of 2019, less than 2% of women business owners make it to a million. My goal is to empower women entrepreneurs with the financial information, solutions and support to grow a profitable business, think differently about their financials to make better decisions and make the money they deserve,” said Tricia. 

When it comes to small business accounting, Tricia has seen the good, the bad, and the ugly as Founder and Principal of The Art of Money Matters, an outsourced accounting and CFO solution for growth-minded small and mid-sized businesses. 

“Business owners come to me with one financial issue, but I usually find that there’s another issue at the heart of the matter,” she said. “For example, I worked with a company that was using an accounting software they weren’t checking regularly. When I began working with them, they had about quarter of a million dollars unaccounted for. I had to recreate their books, and then I noticed a problem with their cash flow. If they didn’t course-correct within two months, they were going to run out of money. Unfortunately they didn’t take heed and they were at risk of not making payroll.”

We sat down with Tricia to talk about what small business owners need to do to stay on top of their finances, so that you can be million dollar earners!

What are the most common financial conundrums that small to mid-sized businesses face?

When I start working with companies, their books are usually a complete mess either because they try to figure it out themselves with limited knowledge of accounting OR they’ve hired the wrong person to take care of it.  And since talking about money – especially for small business owners – is a highly emotional thing, it’s hard for many business owners to admit they need help and then find the right help. They feel since they created or “birthed” the business, they should know everything about it and should be capable of doing everything themselves. The funny thing is that MOST business owners don’t exactly know how to manage their numbers in the best ways and that’s okay. There are professionals, like myself, who take care of that. So it’s important for business owners to let the imposter syndrome and the “I can do it all by myself” feelings go.

You need the right experts and the right tools to help you make the right decisions. Invest in a CPA to do the taxes, a bookkeeper to keep the financial records organized in an accounting system and hire an outsourced CFO, like myself, to think strategically and budget/forecast for growing a profitable business.  Focus on the return on this investment – not return on your ego by DIY’ing your financials. 

I also don’t think many owners understand the importance of looking at their financial information – dissecting their numbers monthly or quarterly to see how their business is performing, what parts of the financials are strong and what parts require more attention until there’s a crisis or emergency. The pandemic is a prime example. Many business owners weren’t on top of their financial situation when the pandemic hit and didn’t have a quick enough understanding of what their needs were. On top of that, they didn’t have a solid relationship with their banker, so they didn’t know what to apply for, and many missed out on the initial rounds of COVID19 funding. My clients were in the know from the first moment COVID-19 grants and loans were mentioned locally and at the federal level.  They had the benefit of having a financial partner that knew the pulse of your business, what they needed and how to get it.

Other common problems I see are poor cash flow management and not having enough money saved up for a rainy day. If nothing else, this final recession has taught us that you need at least 6 months of business and personal expenses in emergency savings to give yourself enough time and space to find alternative cash flow or pivot to other streams of income.  

What should business owners be doing now to improve their financial health? 

First, get their ducks in order.  Make sure their financial records are up to date and complete whether using a spreadsheet or preferably an accounting system.  This allows the owner to easily see how their business is doing, what funding they need and what they need to change to generate more revenue or more profits. What doesn’t get measured, does not get managed! 

When the financials are organized, it’s also easier to figure out how much taxes they might owe so they can either save up the money to pay it or work with their CPA to reduce the tax liability. 

This is especially important as we go into tax season. The beginning of the year is the best time to get organized. 

Cash flow management is also extremely important. Understand your normal cadence of income and make sure you know how to project that into the future. If running out of money – or just barely scraping by – is a regular occurrence, it’s time to get more clients, check your prices, adjust your contracts to collect payments sooner from clients, or seek funding. 

Business owners should also actively manage their personal and business credit. Don’t let it decline just because times are hard.

Finally, business owners should be planning for their future.  If they plan to pivot or make more money by the end of 2021, how are you going to get there financially?  On Thursday January 28th I’ll be giving an interactive webinar, The Secrets to Making More Money and Paying Yourself More! 

How should business owners prepare to seek funding?

There are many funding options including lines of credits and small business loans. But don’t wait until you’re cash-strapped to apply for those because there’s less likelihood that you’ll receive it. Banks are typically looking for certain metrics and ratios besides just your personal credit profile. That’s another reason why you should have a financial expert regularly examining your finances. 

A line of credit is a great option for a lot of business owners, because it has a lower interest than a credit card. Also, you don’t have to use it! I hear from a lot of business owners that they don’t want to “owe anyone money.” But sometimes you need cash for strategic growth and scale. And if you have employees, you need to be sure that you can always cover payroll. That’s where a line of credit can step in, if you need it. 

Looking for more down-to-earth and actionable financial advice? Be sure to bookmark Tricia’s blog, and follow The Art of Money Matters on LinkedIn and Instagram so you never miss a post.

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