Financial Check Up

Financial Check Up

This week our calendar is filled with special days marked to remind us what is coming up. One reminder tells us that it is Tax Day. This is also a great time to look back and see how the first quarter of this year has gone for us. Is this something that you do on a regular basis? How often do you analyze how your business is doing? Do you compare how things are going this year to years past? Let me just say that you should. Why? If you don't, how can you make better business decisions for the future?

Now, you might ask: "What sort of decisions do I need to make?" If you are not tracking how much you earn as well as how much you spend, you may not realize that you might be in the red when you want to be in the black. Did you know that if you track your fuel costs, you might be able to detect a major mechanical issue with your equipment before it turns into something catastrophic? A continuous drop in fuel economy could signal that something serious is going on. If you catch the issue by keeping track of fuel economy, you might save hundreds, if not thousands, of dollars on maintenance costs. Not to mention saving on a very expensive tow bill when you find yourself on the side of the road.

Another reason you want to keep track of your numbers is so that you can plan for the future. Every business, regardless of how large or small they may be, are intended to make money. For very large companies, it might be a publicly traded company that is required by law to submit financials to the shareholders. The company is required to provide a profit and loss statement as well as a balance sheet which shows how much cash passes through the business on a monthly or quarterly basis. As a small business owner, we are also expected to show a profit. Regardless of the fact that we are not a publicly traded company it is still important that we know our numbers. Like a large company, we need to know that we are making a profit. If there is no or limited profit, our business would be considered a hobby. A broke hobby at that!

Profit helps business owners or managers determine the growth of the company. Can the business add expensive equipment or more employees? How often can a business owner take a vacation? Without knowing the numbers we could be digging ourselves a hole of which we cannot get out.

While it is best to keep track of the numbers on a regular basis, it is strongly recommended to go through the numbers on a monthly, quarterly, and annual timeframe. Knowing your numbers can save so much money in the long run.

Here's to millions of safe, profitable and INFORMED miles.

Kelly Plumb