10 Lessons Learned from Growing a Profitable Company: The Playmaker Way

10 Key Principles for Small Businesses to Achieve Financial Stability and Growth with Proper Bookkeeping.

Growing a business from a small team to a thriving company takes more than just a good product or service. Looking at Brandon Harris, founder of Playmaker, an organization that grew from seven employees to more than 70 while remaining profitable every step of the way, we know firsthand the importance of proper bookkeeping in achieving financial stability and growth.

Echoing the Forbes article "10 Keys To Growing A Company Profitably In 2023", here are ten key principles that can help you build a profitable business while maintaining proper bookkeeping practices:

The advice to "test, test, test—then double down" is crucial for any business that wants to succeed, and the same goes for bookkeeping. In order to effectively track expenses and revenue, it's important to experiment with different methods and systems to see what works best for your company. This may involve testing different software or platforms, tracking different categories of expenses, or experimenting with different intervals for tracking financial data.

For example, you might start by using a basic spreadsheet to track expenses and revenue on a monthly basis. As your business grows, however, you may find that this method becomes too time-consuming or error-prone, and you may need to switch to a more sophisticated accounting system that integrates with other tools and provides more detailed reporting.

It's important to remember that bookkeeping is not a one-size-fits-all solution, and what works for one business may not work for another. By testing different methods and refining your approach as needed, you can develop a system that is tailored to your specific needs and helps you stay on top of your financials.

One key benefit of testing and refining your bookkeeping methods is that it can help you identify inefficiencies or areas where you may be overspending. For example, if you notice that you're consistently overspending on a particular category of expense, you may be able to adjust your budget or find ways to reduce those costs. Similarly, if you find that you're consistently bringing in more revenue than expected, you may be able to reinvest those funds in growth initiatives or other areas of your business.

As a business owner, you must understand that what worked for you in the early days of your business may not be sufficient as your business grows. The same principle applies to bookkeeping processes. As your business expands and evolves, your bookkeeping needs will also change. Therefore, it is crucial to regularly assess your bookkeeping processes and ensure they align with your current business needs.

For instance, when your business was still in its early stages, you may have relied on simple accounting software or even manual spreadsheets to manage your financial records. However, as your business grows, you will likely need more sophisticated systems and tools to manage more complex financial transactions and reports. Without upgrading your bookkeeping processes, you risk inefficiencies, errors, and compliance issues that could harm your business in the long run.

Therefore, it's crucial to regularly evaluate your bookkeeping methods and refine them as necessary. Keep an eye on any inefficiencies, inaccuracies, or redundancies in your bookkeeping processes, and look for ways to streamline and automate them. Consider investing in bookkeeping software that can integrate with other business systems, such as your customer relationship management (CRM) and enterprise resource planning (ERP) software, to provide real-time data and improve accuracy and efficiency.

Hiring the right people is essential to the success of any business, and this is especially true when it comes to managing your books. Your bookkeeper is responsible for handling your finances, keeping track of expenses, and ensuring that your financial records are accurate and up-to-date. Making a poor hiring decision in this area can have serious consequences for your business, including financial loss, legal issues, and damaged reputation.

When it comes to hiring a bookkeeper, experience, reliability, and trustworthiness are key. Look for someone who has a solid track record in bookkeeping and accounting, and who has experience working with businesses similar to yours. You want someone who can not only handle the day-to-day tasks of bookkeeping, but who can also provide strategic financial advice to help your business grow.

Reliability is also crucial. Your bookkeeper needs to be dependable and trustworthy, and must be able to meet deadlines and provide accurate and timely financial reports. You want someone who takes their job seriously and is committed to providing the highest level of service to your business.

Trustworthiness is perhaps the most important quality to look for in a bookkeeper. They will have access to sensitive financial information, so it's important to hire someone who has a reputation for honesty and integrity. Conduct thorough background checks, ask for references, and ensure that your bookkeeper is properly licensed and accredited.

In addition to these qualities, it's also important to look for a bookkeeper who is a good fit for your business culture. They should be able to communicate effectively with you and your team and should be willing to collaborate to help you achieve your financial goals. Take the time to interview potential candidates and ensure that they share your values and vision for your business.

Hiring someone who is familiar with your target market and industry is not only important for understanding your customers but also for properly managing your finances. A bookkeeper who is experienced in your industry will have a better understanding of the specific financial challenges and opportunities that you face.

For instance, a bookkeeper who has worked with other businesses in your industry will be more familiar with the common expenses and revenue streams, as well as the appropriate tax laws and regulations. They can also better identify potential financial risks and offer more relevant financial advice and guidance.

Moreover, a bookkeeper who understands your business and industry can be more proactive in spotting trends or issues in your financial statements. They can help you stay on top of cash flow, manage expenses, and make more informed financial decisions.

When hiring a bookkeeper, it’s important to look for someone who has a proven track record in your industry. They should have a clear understanding of the specific accounting practices, laws, and regulations that govern your business. They should also be able to work well with your team and effectively communicate complex financial information to stakeholders.

Culture is a crucial aspect of any business, and it plays a significant role in shaping the behavior of its employees. This is especially true when it comes to financial matters. A positive and transparent culture can create an environment of trust and accountability, making it less likely for employees to engage in fraudulent activities such as embezzlement.

When employees feel valued, respected, and invested in the success of the company, they are more likely to act in its best interest. A culture of transparency and open communication can also make it easier to identify and address potential issues before they become major problems.

On the other hand, a negative or toxic culture can create an environment of secrecy and mistrust, making it easier for employees to engage in fraudulent activities without being detected. This can lead to significant financial losses and damage to the company's reputation.

Proper bookkeeping is a critical aspect of running a successful business. It is not just about tracking expenses and revenue; it is about improving and optimizing financial processes continually. Implementing process improvements and automation can help to reduce errors, streamline tasks, and improve efficiency, ultimately saving time and money.

Using accounting software is one of the most effective ways to streamline bookkeeping processes. These programs can automate many manual tasks, such as data entry, invoice processing, and reconciliation. They can also provide real-time insights into your financials, making it easier to make informed decisions and track your business's performance.

Another way to optimize your bookkeeping processes is to create a standardized system for documenting financial transactions. This system should include a clear set of guidelines and procedures for recording expenses, tracking revenue, and reconciling accounts. Having a standardized process can help to reduce errors and ensure consistency across different financial tasks.

It's important to note that process improvements and efficiency optimizations should be an ongoing process. As your business grows and evolves, so too will your bookkeeping needs. Regularly reviewing and updating your processes can help to ensure they remain effective and efficient over time.

When starting a business, branding and positioning might not seem like a top priority. However, as the business grows, it becomes essential to establish a strong brand image and reputation. The same principle applies to bookkeeping practices. Proper bookkeeping is critical to building credibility and positioning your business for growth.

By keeping accurate financial records and implementing proper bookkeeping practices, you demonstrate to investors, lenders, and customers that you take your business seriously. This can help build trust and establish a positive reputation in the marketplace.

Furthermore, having a solid understanding of your financial position through proper bookkeeping practices can help you make informed decisions about the future of your business. It can also help you identify areas where you can cut costs and optimize your operations.

In addition, having strong bookkeeping practices in place can help you prepare for audits, tax filings, and other financial reporting requirements. This can save you time and money in the long run by avoiding penalties and fines for noncompliance.

Trust is crucial when it comes to bookkeeping. As a business owner, it's important to trust your bookkeeper to accurately track your finances and provide you with timely and reliable reports. Building trust can take time, but it's important to establish a good working relationship with your bookkeeper.

In addition to trusting your bookkeeper, it's also important to trust yourself and your instincts when it comes to financial decisions. While it's important to rely on the expertise of your bookkeeper, ultimately, the financial health of your business is your responsibility as the owner.

To build trust, establish clear communication channels with your bookkeeper and make sure that you both are on the same page when it comes to financial goals and expectations. Regularly review financial reports and ask questions if something seems unclear or if you need more information.

The quote "You don’t have to be great to start, but you have to start to be great" emphasizes the importance of taking action towards your goals, regardless of your current level of skill or expertise. This is especially true when it comes to proper bookkeeping practices.

Many small business owners may feel overwhelmed or intimidated by the prospect of implementing bookkeeping procedures, especially if they do not have a background in finance or accounting. However, waiting until their business is larger and more complex can lead to significant problems down the road.

Starting early with basic bookkeeping practices, such as organizing and tracking expenses and revenue, can help business owners gain a better understanding of their financial situation and make informed decisions for future growth. This can also help prevent costly mistakes and errors that can be difficult to correct later on.

When it comes to bookkeeping, it's important not to compromise your standards. Proper bookkeeping practices are critical to the success of your business. They help prevent costly mistakes, such as incorrect tax filings or missed payments, and help position your business for growth.

To maintain proper bookkeeping standards, it's important to establish clear procedures and guidelines for recording and tracking financial information. This includes using a reliable accounting software, setting up proper account structures, and establishing regular reporting processes. By adhering to these standards, you can ensure that your financial information is accurate, up-to-date, and readily available.

In addition, it's important to resist the temptation to cut corners or take shortcuts when it comes to bookkeeping. This may include things like failing to reconcile accounts, not keeping proper records of expenses, or failing to follow up on outstanding invoices. While it may be tempting to take shortcuts in the short term, doing so can ultimately lead to bigger problems down the road.

In conclusion, proper bookkeeping is a critical component of any small business's success. By following the ten key principles that helped Playmaker grow from seven to 70 employees while remaining profitable every step of the way, small business owners can establish and maintain financial stability while achieving growth. Testing and refining bookkeeping methods, upgrading processes as the business evolves, and hiring a trustworthy, reliable bookkeeper are all crucial elements of effective bookkeeping. By prioritizing these principles, small business owners can ensure that their financial records are accurate, up-to-date, and aligned with their overall business goals. ISAVsmart.com is one such solution that small businesses can rely on for efficient, accurate, and cost-effective bookkeeping. With its user-friendly interface, 24/7 support, and affordable pricing plans, ISAVsmart.com is an ideal bookkeeping solution for small business owners who want to streamline their financial management and focus on growing their business.