Financial setup key to success for small businesses

COEUR d’ALENE — There are as many approaches to business as there are entrepreneurs, but for any small business owner, it's critical to get one thing right.

“It’s important to get their financials set up right from the get-go so they’re not trying to play catch-up down the road,” said Bob Greaton, a business coach at the North Idaho Small Business Development Center.  

After spending most of his career as chief financial officer for a mid-sized mortgage banker headquartered in Washington, Greaton now lends his expertise to local entrepreneurs through the SBDC on the North Idaho College campus. The center offers affordable business training, free coaching and business resources for businesses of all sizes and stages. 

“People don’t realize the importance of knowing your numbers and having financials at your fingertips,” Greaton said. “It adds credibility to your business.” 

Small businesses can sometimes manage their finances on their own and don’t need to hire a bookkeeper or financial planner. 

The real challenge, Greaton said, is finding the time to keep up with the financial side of the business while managing and growing the operation. 

“One of the most important things with financials is that they’re timely and accurate,” he said. “If they’re not done within a reasonable amount of time, they’re not as useful.” 

Whether the books are managed in-house or by an outside professional, any business owner should set financial goals at the beginning of the year and measure progress against those goals. Well-managed finances make it possible to easily make those assessments. 

“One risk of doing the books yourself is those goals getting lost,” Greaton noted. 

There are pros and cons to each approach. 

“One of the risks of doing the financials in-house is that you don’t keep up with them,” Greaton said. “One of the risks of outsourcing them is somebody sends you financial statements every month and you don’t really look at them and understand them.” 

Business owners who choose to hire a professional to handle their finances should make a point of staying informed. 

“Taking time to sit down with whoever is preparing (the financials) and getting a good understanding of what they’re telling you is very important,” Greaton said. 

Virtually all businesses need help with taxes, Greaton said, so it’s also a good idea to find a reliable tax preparer early on. 

“I haven’t seen anybody who really wants to do their taxes by themselves,” he said with a laugh.  

How can business owners find professional financial services that are the right fit for them and their small business? 

Greaton recommends connecting with local chambers of commerce, economic development centers and other networking organizations and seeking recommendations there. Other local entrepreneurs might have recommendations, too. 

“Talk to other business owners and find out who they use and who they like,” he said. “Once you have tax services in place, they may have a good referral for bookkeeping.”