Imagine heading out for an important trip. The destination is set, the tank is full, and the excitement is high. But somewhere along the way, the GPS loses signal, the speedometer stops working, and suddenly, the gas light flickers on. Without the right tools to guide the trip, there’s no telling where—or if—you’ll arrive.
Running a business without strong financial habits is a lot like that uncertain road trip. Even businesses with great products, dedicated teams, and growing customer bases can struggle if their finances aren’t under control. The difference between a company that survives and one that thrives often comes down to a structured financial system—one that includes clear goals, a plan, and the ability to adjust when needed.
Financial literacy is more than just understanding numbers; it's about making informed decisions that drive success. According to Forbes, “Financial literacy empowers business owners to make informed decisions, strategically allocate resources, and ultimately gain a competitive edge in their industry”. Yet, many business owners overlook this critical skill, leaving them vulnerable to financial missteps.
This ten-step survival kit provides the financial tools needed to navigate business ownership with confidence.
Every successful journey begins with a clear destination. In business, this means establishing specific, measurable, achievable, relevant, and time-bound (SMART) financial goals. Without financial goals, business owners react to challenges rather than plan for success.
Maybe your plan is to launch a landscaping business so you can leave your current job. When you convert that goal to a SMART destination, your plan then might be "By December, my landscaping company will generate sales of $25,000 each month and spend $15,000 monthly. Once the company reaches a net income of $10,000 consistently for three months, I can leave my job and run my business full time."
With this clearly defined goal, you will know exactly when you have achieved what you set out to do.
A financial plan serves as a map, outlining where a business is headed and how to get there. Without a structured plan, it’s easy to veer off course. A strong financial plan includes projected income, expenses, savings, and reinvestment strategies.
Start by building a budget. It's OK if it is simple. Just start with something. Include a sales target (monthly is best) with estimated expenses. Calculate your net profit. Get the numbers on the board. Not only does this give you a clear target, but it also can help you manifest your success because you took the time to write it down!
According to research by ProfitTree, businesses with written financial plans grow 30% faster than those without one. A well-structured financial plan not only drives growth but also helps business owners navigate slow seasons, manage unexpected costs, and seize investment opportunities.
A business can generate revenue but still run out of money if cash flow isn’t properly managed. When expenses outweigh available funds, financial trouble is unavoidable - you can miss payroll, slow pay vendors and lack capital to take advantage of great market opportunities. Your business stalls.
To maintain steady cash flow, businesses should:
Proper cash flow management ensures day-to-day operations continue smoothly. The Small Business Administration offers helpful tips for managing your finances and explains the basics of accounting.
Every vehicle has a dashboard that tracks speed, fuel levels, and system warnings. Businesses need a financial dashboard to monitor financial health in real time.
Some key metrics to track include:
Financial tracking tools like QuickBooks or Xero can help business owners collect their business’s financial activity and build these metrics. If you need help, MoneyFit’s financial services provide customized financial tracking solutions for businesses.
Even the most well-planned trips run into unexpected detours. Businesses need emergency funds to handle surprises without disrupting operations.
Experts recommend setting aside three to six months’ worth of operating expenses in an accessible account. This buffer provides security when cash flow is tight, equipment breaks down, or unexpected expenses arise.
Every business owner needs a great banker, a reliable financial advisor, and a plan to ensure their company can weather financial bumps in the road. A strong banking relationship can help you access lines of credit or business savings accounts designed to keep you prepared for the unexpected.
Even experienced drivers use GPS when navigating unfamiliar territory. No matter the size of your organization, taking time to build your own board of directors. The experienced professionals can help guide you out of the woods.
Consider recruiting a board that includes:
The landscape is always changing. Staying informed helps business owners make better decisions. Regulatory updates, market trends, and business strategies evolve, and ongoing education ensures financial plans remain relevant.
Drivers watch the horizon and road signs - not just the dashboard. As an owner, you need to know your company's space in the marketplace as external factors shift. You have to watch the horizon.
Some ways to stay informed:
If you need help understanding financial basics, try taking a class at a local community college. Alternatively, the National Financial Educators Council provides resources to help improve financial literacy as well. There are many different ways to stay up to date on what’s happening and improve your financial literacy to the best of your ability.
A dashboard helps drivers track their progress, and financial metrics help business owners do the same.
If a car dashboard measures speed, fuel levels and engine RPM, what factors are most important to your company's health? Not every company uses the same metrics. It's OK to listen to your gut on this one. Is it the number of new customers each month? Gross profit margin? Cash on deposit? Pick what matters and track it.
To learn more about choosing a great KPI for your company, read “Good to Great” by Jim Collins.
Financial success isn’t built overnight. Businesses that survive and grow develop consistent habits that keep them financially strong. This includes:
Long-term success comes from making steady, intentional financial decisions.
Profitable business owners reinvest profits back into the company to fuel growth. Strategic reinvestment can move a business from running on 4 cylinders to a turbo V6.
Some reinvestment strategies include:
Successful business owners don’t rely on luck—they establish strong financial habits that guide their decisions. By following this ten-step financial survival kit, businesses can create stability, adapt to challenges, and position themselves for long-term growth.
Successful businesses follow a system that keeps them financially prepared—just like a well-planned road trip.
Entrepreneurship is thrilling and can also be a bit scary. If you would like a road buddy, there are professionals available to help. MoneyFit provides financial expertise and resources to help business owners develop and maintain financial success. A strong financial foundation isn’t just about making money—it’s about making the right choices with money. Contact MoneyFit today to make sure you’re on the right road for your business journey.