How to get your Business Financially Fit

As a small business owner, you know how important it is to have a passion for your products and services, but it’s equally important to have the financial skills to make critical business decisions.

Many small business owners have struggled with managing their finances effectively. In many cases, these business owners did not establish a solid financial management framework, which ultimately impacted their ability to achieve business success.

An excellent way to help small business owners stay on track is to ask themselves, “Is your business financially fit?” to ensure they have established business finance fundamentals. These fundamentals should include planning, recording, managing, funding, and tracking business performance. Without these fundamentals in place, small business owners risk losing control over their finances and may find it challenging to make informed financial decisions.


As a small business owner, you must clearly understand your business goals and objectives and the steps you need to take to achieve them. This means creating a detailed business plan, including your business vision, risk management, insurance, financial forecast, IP protection, etc. The business plan will help you understand your business’s financial needs to help you make informed financial decisions and avoid running into financial trouble.


As a business, we need to, by law, keep detailed records of all transactions to meet tax, superannuation, and employer obligations. This includes tracking expenses and revenues, maintaining financial documents, and reconciling bank statements. Therefore, it’s essential to know what records to keep meeting legal requirements and how long to keep records to have a clear picture of your business’s financial health and meet your financial compliance and commitments.


The cash flow cycle is the time it takes for a business to convert cash into goods and services and then back into cash. The cycle extends from when companies pay the bills and suppliers to when they receive cash payments for outstanding customer invoices. The shorter the cycle, the more cash the business brings in the cash. 

Managing business performance means we need to control every step in the cycle. This involves understanding key cash drivers and how to make management decisions on strategically planning for sales growth and future expenses, maximizing cash flow, monitoring debts, and conducting tax planning. It will help you identify areas where you can reduce costs and increase revenue. Staying on top of your finances to maximize your cash flow, avoid financial issues and make informed decisions is crucial.


One of the biggest challenges that small business owners face is securing funding. Whether you need a loan or seek investors, you must clearly understand your financial needs and available options.

Most small business owners start with a self-funding option. For example, use your own saving or accept Family and Friends’ contributions. However, as a business grows, we need to explore other funding options to release pressure on cash flow and personal finances. This includes traditional funding sources such as equity funding, debt funding, and government grants, as well as alternative options like crowdfunding and cash flow solutions. Exploring all funding options is essential to find the best fit for your business.

Tracking business performance

Every business needs to track performance to monitor and address cash flow issues. Tracking accurately and checking against the industry benchmarks reveal how your business is performing against your plan and your competitors and allows you to revisit your financial forecast with a clear path to improve your financial performance. This can involve analysing financial statements, monitoring key performance indicators, and identifying areas where you can improve. It’s essential to track your financial performance to ensure you meet your financial goals and make informed decisions.

Establishing a solid financial management framework and nurturing a positive cash culture is essential for achieving business success. By taking the necessary steps to develop these fundamentals in your business, you can ensure that you clearly understand your finances and make informed financial decisions. As a result, you can make sure that your business is financially fit and well-positioned for growth. 

This blog was written by Business Advisor Judy Hendricks and is a part of our WOMEN’S BUSINESS Series.

If you would like to learn more from Judy she will be hosting two up and coming workshops How to apply for Bank Loan and Getting you Business Finance Fundamentals Right.

The Realise Business team is adept at stepping in at all levels to meet business financial requirements. Our team has experience in managing finances for a wide range of industries. As a result, we can devise a tailored financial plan for a new business. If you would like to know more, get in touch.

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