Five Steps to Get your 2010 Small Business Financial House in Order

financial house
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Is your small business financial house in order?

2010 is upon us. Hopefully by now you’ve prepared your strategy, broken it up into goals for the year and now back into the grind of the day-to-day tasks that help move you towards those goals.  Before you get too deep back into the tactical execution of your business tasks, I urge you to make sure your financial house is in order, or you at least have a plan to get there.

2009 was one of the most challenging years for small business owners to access credit.  Whether you plan on trying to access credit or not in 2010, you and your business will benefit by taking a few simple steps to make sure you focus on increasing the net worth of your business before December 31, 2010.

  1. Check your personal credit: A regular check of your personal credit report will help to insure there are no errors or potential issues. Make sure your debts, payment history and personal information are accurate.  In the event you need financing, you don’t want a lender to be the one to tell you about a late payment or debt that isn’t really yours.
  2. Check your business credit: A check of your business credit should include a review of your Dun & Bradstreet file. This will include D & B’s business credit rating, known as a Paydex, along with a listing of owners, industry and other pertinent details.  Incorrect information on this report can delay or prevent you from getting financed.
  3. Check your Secretary of State listing: Depending on your state, these typically need to be renewed every year and most lenders will require it is up to date before extending an offer for financing.
  4. Update your personal financial statement: Not all types of financing (such as equipment leasing) will require this document. However, it is not just a good document to have on hand if you do need it for financing, filling out a personal financial statement can help to show where you should focus your financial attention in 2010.
  5. Create your 2010 Financial Statement Now: What do you want the financial picture of your business to look like at the end of 2010? What does your 12/31/10 Balance Sheet look like? What is your net profit? Setting these targets today will bring you closer to making that financial picture a reality.  Commit to yourself that  every financial decision in 2010 must bring you closer to these goals, or don’t do it.

What other steps have you taken to make sure your financial house is in order?

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Photo Credit: H Dickins