Profitability doesn’t happen by accident. It results from consistent financial discipline and clear visibility into your numbers. These five practical steps can help strengthen your business and improve long-term profits.
1. Track Your Cash Flow Weekly
Ask two simple questions each week: How much cash came in, and where did it come from? How much went out, and where did it go?
If you can’t answer these quickly, you’re operating without visibility. Weekly cash tracking provides a real-time snapshot that financial statements alone may not. Over time, patterns emerge—recurring expenses, seasonal dips, predictable revenue cycles. This insight allows you to forecast ahead.
A 13-week cash flow forecast is a practical tool for anticipating shortfalls and making proactive decisions. For newer owners or those less comfortable with financial statements, this is one of the most powerful habits you can build.
2. Build Cash Reserves
Healthy businesses prioritize liquidity. While holding a full year of operating expenses may be unrealistic, keeping only a few weeks of cash is risky. A practical goal is three to four months of operating expenses in reserve.
Also consider securing a line of credit for emergencies—but treat it as backup, not routine funding.
Strong cash reserves reduce stress, provide stability, and allow you to act quickly when opportunities arise.
3. Invest in Quality Bookkeeping
Accurate financial records are foundational. If you handle your own bookkeeping, consider hiring a professional. If you already have one, evaluate the quality of reporting.
Good bookkeeping should be consistent, timely, concise, and trustworthy. If you avoid reviewing financial statements because you don’t trust the numbers, improvement is needed.
Treat bookkeeping as an investment in better decisions—not just an expense.
4. Establish a Monthly Financial Review
Receiving financial statements isn’t enough—you need a structured review process. Each month, compare year-over-year results, evaluate growth trends, analyze margins, review cash flow, and track key metrics.
Over time, this routine helps you understand your financial story and communicate it clearly to lenders, partners, and your team.
5. Create a Scorecard
A scorecard tracks the few metrics that matter most—revenue growth, margins, cash balance, inventory, and fixed costs, for example. Monitoring 10–15 key indicators monthly creates an early warning system that highlights what’s improving and what needs attention.
Profitability isn’t just about increasing revenue. It’s about managing cash, maintaining discipline, and consistently reviewing performance. Build these habits, and your business will be positioned for sustained success.
If you’d like to learn more about increasing the profitability of your small business, contact your Wyoming SBDC Network advisor who is available to provide no-cost, confidential assistance. Get started today by clicking here.
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About the Wyoming SBDC Network: The Wyoming SBDC Network offers a large amount of business expertise to help Wyoming residents think about, launch, grow, reinvent or exit their business. The Wyoming SBDC Network is hosted by the University of Wyoming with state funds from the Wyoming Business Council. Funded in part through a Cooperative Agreement with the U.S. Small Business Administration. Full funding disclosures available at
wyomingsbdc.org/about
All opinions, conclusions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.
