If you are the kind of person who says, “oh my accountant looks after that” then it is time to take a moment and check if that is really what you want to do.
In our industry, we are always focussed on having successful events. We want our clients to be happy, our delegates to be happy and our suppliers to be happy too. We need to make sure we’re also happy. And our accounts are a big part of that.
Don’t get me wrong, success is measured differently by everyone. Some do this for the buzz, others because it is a great way to create a flexible business, others because of the people they work with, but no matter how you measure success, the financial considerations will be there somewhere.
Typically, I look at success in my events and my business in terms of the “3 Rs”. Return on investment, return on objectives and return on energy. While return on investment is not the only thing, it is an important thing. If your business is slowly sending you broke, no matter how much fun you’re having, you will need to do something to afford to live!
If you are running a business, here are some thoughts on how you can stay in touch with your finances and keep your ROI going strong.
Check your banking weekly
I regularly check my banking to keep an eye on my cash flow and ensure I have enough to pay my regular expenses and my team. (And pay myself too.)
Know your regular expenses
No doubt you will have regular expenses like rent, phone, communications, wages, car payments and the like. Know when they are going to hit your bank account or credit card and be sure you have enough money to cover them.
Understand the difference between cash flow and profit
Too many people get disappointed when comparing their profit and loss statement against their bank account. “Where did the money go?” is a common refrain. Sometimes your expenses do not occur on your profit and loss. Car leases, new equipment purchases and several other expenses appear differently on your accounts. Be prepared for it and understand it.
Learn how to read a profit and loss and balance sheet report
While money isn’t everything, it sure is handy. So, we need to understand the financial health of our business. The P&L and BS is how you check your business health. Learn how to read them. Get help from your bookkeeper or accountant and they will happily take the time to show you how to generate and read one. This is too important to delegate to someone else.
Focus on increasing income rather than reducing expenses
Too often when cash flow gets tight, people start reducing costs. While it is imperative to be in control of your costs, it can be far better to increase your income. There are only so many costs you can reduce but increasing income is almost endless.
This financial year is looking very positive for the events industry. We have more venues coming online. We have new ways to increase engagement. Our delegates are keen for an “event experience” and the event technology to help make things happen just keeps getting better. Make sure you and your business are ready for success.
Warwick Merry is a global award-winning event host and event evangelist. For 25 years he has been hosting and producing online, hybrid and in-person events. He is the host of the Making Events Awesome livestream and monthly Conference Organisers Forum.
