Deciding whether or not your business is ready to take on investment from an investor is a significant decision that requires careful consideration. There are several factors that can help you determine whether or not your business is ready for investment, as well as several risks associated with accepting investment. Forte’s financial expertise can help you navigate these many questions and make sure you keep your business healthy. 

Financial Position

One key factor to consider when determining whether or not your business is ready for investment is its current financial position. If your business generates significant profits and has a strong balance sheet, it may be more attractive to potential investors. On the other hand, if your business is struggling financially or has a lot of debt, it may not be the best time to seek out investment.

Stage of your Business

Another important factor to consider is your business’s stage. If your business is still in the early stages of development, it may be too soon to seek investment. Investors generally prefer to invest in well-established businesses with a proven track record of success. If your business is still in the development phase, it may be better to focus on generating revenue and building a strong foundation before seeking investment.

Plan

It is also important to have a clear idea of how you plan to use the investment. Investors will want to see a clear plan for how their investment will be used to grow the business. This could include expanding into new markets, increasing production capacity, or developing new products or services. If you don’t have a clear plan for how the investment will be used, it may be difficult to convince an investor to invest in your business.

Risks 

In addition to these factors, it is important to carefully consider the risks associated with accepting investment. One risk is the potential for loss of control. When you accept investment, you may be required to give up some level of control over your business in exchange for the funding. This can be particularly challenging for entrepreneurs who are used to making all of the decisions for their business.

Another risk is the potential for dilution of ownership. When you accept investment, you may be required to issue new shares of your business to the investor. This can dilute your ownership stake in the company, which can be particularly challenging if you are passionate about maintaining control over your business.

Terms 

Finally, it is important to carefully consider the terms of the investment. Make sure that you fully understand the terms of the investment, including the amount of funding being offered, the length of the investment, and the level of control the investor will have over your business. It is important to have a lawyer review the terms of the investment to ensure that your interests are protected.

In conclusion, there are several factors to consider when determining whether or not your business is ready for investment, including its financial position, stage of development, and plans for using the investment.  It is also important to carefully consider the risks associated with accepting investment, including the potential for loss of control, dilution of ownership, and unfavorable terms. Forte Business Services can help you navigate all of your financial questions, including if your business is investment-ready. Our goal is to help you maintain a healthy business so you can focus on your forte, and we will ensure you make an informed decision.

As a co-founder, there are numerous responsibilities that fall on your plate. One of the most essential is working through various questions before writing an operating agreement. An operating agreement is a legal document that outlines the rights and responsibilities of each co-founder and the business itself. It is a critical document that helps establish the company’s foundation and ensures that all co-founders are on the same page.

Before beginning to draft an operating agreement, co-founders should consider the following questions:

1. What is the structure of the company?

• Will the company be a partnership, corporation, or limited liability company (LLC)?
• Who will be the owners (also known as members or shareholders) of the company?
• What percentage of ownership does each co-founder have?

It is important to clearly define the structure of the company in the operating agreement. The choice of business structure will have significant legal and tax implications, so it is essential to choose the right one for your company. A partnership is a business owned by two or more individuals who share profits and losses. A corporation is a separate legal entity that is owned by shareholders and managed by a board of directors. An LLC is a hybrid structure that combines the liability protection of a corporation with the tax benefits of a partnership.

The operating agreement should also clearly define the company’s ownership structure. This includes the percentage of ownership held by each co-founder and any additional owners or investors. Determining the ownership percentages at the outset of the company is essential, as it will impact how profits and losses are shared and how decisions are made within the company.

2. How will decisions be made within the company?

• Will decisions be made by a majority vote or by consensus?
• Who will have the final say in the event of a disagreement?
• How will new members or investors be brought on board?

The operating agreement should outline the process for making decisions within the company. This can include a majority vote system, where decisions are made based on the majority of votes, or a consensus-based system, where all co-founders must agree on a decision before it can be implemented. It is essential to determine the decision-making process upfront to avoid disputes down the line.

In the event of a disagreement, it is also important to have a clear process for resolving disputes. This can include mediation or arbitration, where a neutral third party helps to facilitate a resolution. It is also important to consider who will have the final say in the event of a deadlock.

The operating agreement should also outline the process for bringing new members or investors on board. This can include the requirements for becoming a member or investor, as well as the process for issuing new shares or membership units.

3. How will profits and losses be shared?

• Will profits and losses be shared equally among co-founders, or will they be based on each co-founder’s ownership percentage?
• How will profits be reinvested in the company?

The operating agreement should specify how profits and losses will be shared among co-founders. This can be based on each co-founder’s percentage of ownership or on a predetermined formula. It is essential to clearly define the profit and loss sharing structure to avoid disputes and ensure that all co-founders are treated fairly.

The operating agreement should also outline how profits will be reinvested in the company. This can include using profits to fund new initiatives, pay off debt, or distribute dividends to shareholders.

4. How will the company be managed?

• Who will be responsible for managing the day-to-day operations of the company?
• How will major business decisions be made?
• Will there be a board of directors or a management team?

The operating agreement should outline the management structure of the company and specify who will be responsible for managing the day-to-day operations. This can include assigning specific tasks and responsibilities to each co-founder or hiring a management team.

The operating agreement should also outline the process for making major business decisions. This can include a majority vote system, where decisions are made based on the majority of votes, or a consensus-based system, where all co-founders must agree on a decision before it can be implemented.

Depending on the company’s size and complexity, a board of directors or a management team may be necessary to assist with decision-making and management. The operating agreement should outline the responsibilities and composition of these groups.

5. How will disputes be resolved?

• What process will be followed in the event of a dispute between co-founders?
• Will disputes be resolved through mediation or arbitration?

Disputes are an unfortunate but common occurrence in business, and it is essential to have a clear process for resolving them. The operating agreement should outline the steps to be taken in the event of a dispute between co-founders. This can include mediation or arbitration, where a neutral third party helps to facilitate a resolution.

Mediation involves bringing in a mediator to help facilitate a resolution between the parties involved in the dispute. The mediator is a neutral party who helps to facilitate communication and negotiation between the parties but does not have the authority to make a decision.

Arbitration is a more formal process in which an arbitrator hears both sides of the dispute and makes a binding decision. The decision of the arbitrator is final and cannot be appealed.

6. How will the company be dissolved?

• Under what circumstances can the company be dissolved?
• How will the assets of the company be distributed in the event of dissolution?

It is important to consider the possibility of dissolution and outline the process in the operating agreement. The operating agreement should specify the circumstances under which the company can be dissolved and outline the process for doing so.

The operating agreement should also outline how the assets of the company will be distributed in the event of dissolution. This can include distributing assets to the co-founders or shareholders based on their percentage of ownership or following a predetermined formula.

7. How will intellectual property be handled?
   • Who will own the intellectual property created within the company?
   • How will intellectual property be used and licensed?
   • Intellectual property refers to the creations of the mind, such as inventions, literary and artistic works, and symbols, names, and images used in commerce. It is essential to clearly define in the operating agreement who will own the intellectual property created within the company and how it will be used and licensed.
     • In some cases, co-founders may want to retain ownership of their individual intellectual property, while in other cases, they may want to assign ownership to the company. It is essential to determine this upfront to avoid disputes down the line. The operating agreement should also outline how the company’s intellectual property will be used and licensed. This can include granting licenses to third parties to use the intellectual property or restricting its use within the company.
8. What are the roles and responsibilities of each co-founder?
   • What specific tasks will each co-founder be responsible for within the company?
   • Will co-founders have defined job titles, or will they perform various tasks?
   • It is essential to clearly define each co-founder’s roles and responsibilities in the operating agreement. This can include assigning specific tasks and responsibilities to each co-founder or giving them broad responsibility for certain areas of the business. Co-founders may also have defined job titles, such as CEO or CFO, or they may perform various tasks as needed. The operating agreement should outline the job titles and responsibilities of each co-founder to ensure a clear understanding of who is responsible for what within the company.
9. How will compensation be determined?

• Will co-founders receive a salary or be compensated through the distribution of profits?
• How will the amount of compensation be determined?

The operating agreement should outline how co-founders will be compensated for their work. This can include a salary, a percentage of the company’s profits, or a combination of both.

If co-founders will be paid a salary, the operating agreement should specify the amount and frequency of the salary payments. If co-founders will be compensated through the distribution of profits, the operating agreement should outline the formula for determining the amount of the distribution.

By answering these questions, co-founders can gain a clear understanding of how the company will be structured and operated. This will help to ensure that the operating agreement accurately reflects the needs and goals of the company and its co-founders.

It is important to note that an operating agreement is a legally binding document that should be carefully drafted with the assistance of an attorney. It should also be reviewed and updated periodically to ensure that it accurately reflects the company’s current state.

By considering these issues, co-founders can create a strong foundation for their company and ensure that all co-founders are on the same page. Forte has helped guide many small business owners as they navigate executive roles. Our Executive Coaching services can help founders with co-founder agreements and all of the various responsibilities executives face.

As a small business owner, finding a mentor can be an incredibly valuable experience. A mentor can provide guidance, support, and encouragement as you navigate the challenges of entrepreneurship. Our executive coaching team can help you on your journey to finding a mentor and the resources you need to grow as a leader. 

First, consider your goals for the mentorship. Do you want someone who can provide guidance on specific business challenges you’re facing? Are you looking for someone who can offer advice on career development or personal growth? Understanding your own needs will help you find a mentor who is a good fit for you.

Next, think about the type of person you want to work with. Do you prefer a more hands-on approach, or are you looking for someone who can offer more general advice and guidance? Do you want a mentor who has experience in your industry, or do you think a mentor with a different background could offer a fresh perspective? Consider what qualities and characteristics are important to you in a mentor.

Once you have a clear idea of what you want from a mentor, you can start your search. There are a few different ways to find potential mentors:

1. Networking events and professional associations: Attend events and join associations related to your industry. This is a great way to meet other professionals who may be able to offer guidance and support.
2. Online communities and forums: There are many online communities and forums where small business owners can connect with each other and discuss their experiences. You may be able to find a mentor through one of these platforms.
3. Personal connections: Think about people in your personal or professional network who may be able to offer mentorship. This could include friends, family members, or colleagues.
4. Professional coaching or mentorship programs: There are organizations that offer professional coaching and mentorship programs specifically for small business owners. These programs can be a good option if you’re looking for a structured mentorship experience.

Once you’ve identified a few potential mentors, reach out for a meeting. Explain what you’re looking for in a mentor and why you think they would be a good fit. If they’re interested, schedule a time to meet and discuss the mentorship further.

It’s important to be clear about your expectations and goals for the mentorship from the start. Have a plan for how often you’ll meet and what you’d like to accomplish during those meetings. Be open to feedback and willing to listen to your mentor’s advice, but remember that the mentorship is ultimately about your own growth and development.

Ultimately, finding a mentor can be a rewarding and valuable experience for small business owners. By knowing what you want from the relationship and being proactive in your search, you can find a mentor who can help you achieve your goals and grow as a business owner.

Developing effective SOPs requires a thorough understanding of your business processes and the ability to document them clearly. Forte’s operations team specializes in helping small businesses create and implement SOPs tailored to their unique needs. Here’s how we can support you:

1. Process Analysis and Documentation

   Our experts will work closely with your team to observe and analyze your current processes. We’ll identify key functions and areas where standardization can improve efficiency and quality. Then, we’ll document these processes in a clear, organized manner, creating detailed SOPs that your team can easily follow.

2. Process Improvement

   Beyond documentation, we’ll offer recommendations for process improvements. By refining your existing procedures, we’ll help you enhance efficiency, reduce waste, and increase overall effectiveness. Our goal is to ensure that your SOPs not only standardize operations but also optimize them.

3. Implementation Support

   Implementing new SOPs can be a significant change for your team. We provide hands-on support to ensure a smooth transition. This includes training your staff on the new procedures, answering any questions they may have, and providing ongoing support to address any issues that arise.

4. Monitoring and Updating

   Business environments are constantly evolving, and your SOPs need to keep pace. We’ll help you establish a system for regularly reviewing and updating your SOPs to ensure they remain relevant and effective. This proactive approach ensures that your business continues to operate efficiently as it grows and changes.

Standard Operating Procedures are essential for maintaining consistency, efficiency, and quality in small business operations. They provide a clear framework for training, compliance, and scalability. Forte’s operations team is dedicated to helping you develop and implement SOPs that will support your business’s growth and success. With our expertise, you can ensure that your operations run smoothly, allowing you to focus on what you do best—growing your business.

Ready to take your business operations to the next level? Contact Forte today to learn more about our SOP development services and how we can help you streamline your processes for success.

In the hectic world of small business, maintaining efficiency and consistency is crucial for success. One of the most effective ways to achieve this is through the development of Standard Operating Procedures (SOPs). SOPs are detailed, written instructions designed to achieve uniformity in the performance of specific functions. They serve as the backbone of any successful business, ensuring that every team member is on the same page and operations run smoothly. Here’s why SOP development is vital for small businesses:

Why SOP Development Matters

1. Consistency and Quality Control
SOPs ensure that every task is performed the same way every time, reducing variability and increasing the quality of your products or services. This consistency builds trust with your customers, who can rely on your business to meet their expectations.

2 .Efficiency and Productivity
With SOPs in place, employees know exactly what steps to follow to complete their tasks. This clarity reduces time spent figuring out processes and minimizes errors, leading to increased productivity and efficiency across your operations.

3. Training and Onboarding
SOPs are invaluable tools for training new employees. They provide clear instructions on how to perform tasks, making the onboarding process faster and more effective. New hires can quickly get up to speed, reducing the learning curve and freeing up senior staff to focus on their core responsibilities.

4. Compliance and Risk Management
Many industries require strict adherence to regulations and standards. SOPs help ensure that your business complies with these regulations, reducing the risk of legal issues and fines. They also provide a clear framework for addressing potential risks, ensuring that your business is prepared to handle challenges.

5. Scalability
As your business grows, maintaining control over your operations becomes more challenging. SOPs provide a scalable foundation, ensuring that new team members and departments can integrate seamlessly into your existing workflows without disrupting your operations.

The team at Forte understands the importance of SOP development because we have seen how SOP implementation helps our team, and our clients teams’ operate more efficiently. We know when you’re running a business, you often have too much going on and not enough time to stop and document your processes. That’s why we’re here to help your business run smoothly and implement SOP’s for you and your team, so you can get back to focusing on growing your business.

Scaling a small business is an exciting yet challenging endeavor. Determining the right time and approach to expand requires a deep understanding of your company’s financial health, market position, and internal capabilities. At Forte, we recognize that scaling a business involves more than just seizing opportunities; it necessitates strategic planning, strong leadership, and robust systems to support sustained growth.

1. Strong financial performance: If your business is generating consistent profits and has a healthy balance sheet, it may be a good time to consider scaling. This includes having a solid cash flow and a healthy level of reserves to support your growth. Forte’s Finance team can help you evaluate your books and see if your business is in a place to scale, or help tell you where you will need to be in order to grow. It’s also important to have a clear understanding of your financial goals and the resources you’ll need to achieve them.
2. High demand for your products or services: If you’re consistently meeting or exceeding your sales goals, and there is still a demand for more, it may be a good time to consider scaling your business. This could involve increasing production, expanding into new markets, or introducing new products or services.
3. Limited capacity: If you’re unable to meet customer demand due to limited capacity, scaling your business may be necessary to meet this demand. This could involve investing in new equipment or hiring additional staff to increase your production capacity.
4. Market opportunity: If you see an opportunity to expand into new markets or offer new products or services, it may be a good time to consider scaling your business. This could involve entering a new geographic region, launching a new product line, or diversifying your customer base.
5. Competition: If your market is experiencing increased competition, scaling your business may be necessary to stay competitive. This could involve investing in marketing and sales efforts to increase brand awareness or developing new products or services to differentiate yourself from your competitors.

There are also several internal factors to consider when determining whether to scale your small business:

1. Leadership: As your business changes and grows, you’ll need strong leadership to guide the way. This includes having a clear vision, a well-defined strategy, and the ability to inspire and motivate your team.
2. Team: As your business scales, you’ll need a talented and dedicated team to support your growth. This includes hiring the right employees and investing in training and development to ensure your team has the skills and knowledge needed to succeed. Forte’s HR services can support your business with hiring, onboarding and training. 
3. Systems: As your business grows, it’s important to have systems to help you manage and optimize your operations. This may involve implementing new software or tools to streamline processes or developing standard operating procedures to ensure efficient operations. The Forte Operations team is skilled at helping you manage these any new projects that might come with growing your business. 
4. Culture: Building a strong company culture is essential for any business looking to scale. This includes establishing clear values and guiding principles to help your team stay aligned and focused on your shared goals. Forte’s HR team can provide insights on establishing a strong company culture. 
5. Capital: Finally, scaling a small business often requires a significant capital investment. This may include funding to hire new employees, purchase equipment, or expand your operations. It’s important to carefully evaluate your financing options and choose the right solution for your needs.

While there are numerous factors to consider when looking to scale your business, ultimately, the decision to scale should be based on carefully evaluating your business and its growth potential. The Forte team is dedicated to helping guide your business through this process and any challenges it faces. We aim to provide supportive services you need help with so you can focus on your forte. 

Starting and running a small business is challenging and requires a deep understanding of various business concepts. As a small business owner, you need to have a solid understanding of not only the day-to-day operations but also the strategies and tactics that will help your business thrive. In this article, we’ll discuss essential business concepts that every small business owner should be familiar with to ensure that their business runs efficiently and profitably. We’ll also explain why each concept is crucial and the problems that can arise from not understanding each concept.

The team at Forte can help you manage various key business activities such as finances and accounting services, human resources management, and operations so you can lead and focus on your forte. 

1. Business Plan: A business plan is a written document that outlines a company’s goals, strategies, and projected financial performance. It is important for small business owners to have a business plan because it provides a roadmap for the business and helps the owner measure progress and make adjustments as needed. Without a business plan, a small business owner may lack direction and have difficulty achieving their goals. Additionally, a business plan is often required when seeking funding from investors or lenders, so not having one can make it more difficult to secure the necessary capital to start or grow the business.

2. Financial Management: Financial management is the process of planning, organizing, and controlling a business’s financial resources to achieve its goals. It is important for small business owners to understand financial management because it ensures that the business has enough cash flow to meet its obligations and that expenses are controlled to maximize profitability. Without proper financial management, a small business may struggle to pay bills on time or overspend, leading to financial difficulties and even bankruptcy.

3. Sales and Marketing: Sales and marketing are the process of promoting and selling products or services. It is essential for small business owners to understand sales and marketing because it helps the business attract and retain customers, which is essential for generating revenue. Without a solid sales and marketing strategy, a small business may struggle to find customers and may not be able to generate enough revenue to sustain itself.

4. Customer Service: Satisfied customers are more likely to return and recommend your business to others. It’s important to understand and know your customer base well so that you can meet their needs. Supporting and assisting customers before, during, and after a purchase is necessary to provide a good experience. It’s important to note that understanding your customer base doesn’t stop- as your business changes or clientele grows, it’s necessary to continue to understand your customers.

5. Operations Management: Operations management is the process of planning, organizing, and controlling a business’s internal processes in order to achieve efficiency and effectiveness. As you set your operations into place or make adjustments to your operations processes, at Forte we highly recommend that your team documents each step of the process. Proper documentation of procedures helps your business run smoothly as you grow your team or make changes to management.

6. Human Resource Management: Human resource management is the process of managing a company’s employees, including recruiting, training, and developing staff. Small business owners need to understand human resource management because it helps the business attract and retain talented employees, which is essential for achieving its goals. Without proper human resource management, a small business may struggle to find and retain qualified employees, which can lead to a lack of productivity and increased turnover.

7. Supply Chain Management: Supply chain management is the process of managing the flow of goods and services from suppliers to customers. It is important for small business owners to understand supply chain management because it helps the business minimize costs and ensure that it has the necessary materials to meet customer demand. Without proper supply chain management, a small business may struggle to get the materials it needs at a reasonable price, which can lead to increased costs and difficulties in meeting customer demand.

8. Risk Management: The process of identifying, assessing, and mitigating risks that may impact a business. This is important because it helps the business minimize the impact of unexpected events and maintain stability. Conducting a SWOT Analysis is helpful in assessing risks. 

9. Strategic Planning: Strategic planning is a systemic and disciplined process used by a business to define its vision, mission, goals, and objectives. It is a forward-looking and comprehensive approach to managing the future and ensuring long-term success. Strategic planning is crucial because it helps the business stay focused on its goals and adapt to changes in the market. At Forte, we like to break our core objectives into annual and quarterly goals, so we work toward our larger objectives each quarter. The Forte team can help guide and work alongside you through your strategic planning process and operations.

10. Leadership: The ability to guide and inspire a team to achieve a common goal. Strong leadership helps unite and build a strong team and leads the business to achieve its goals. Forte offers leadership and management training as well as fundraising and strategy support to help you lead your company. 

Small business founders may be hesitant to pursue equity dilution as a means of raising capital from investors due to concerns about losing control over their company or receiving a lower return on investment. However, there are several reasons why small business founders should not be afraid of equity dilution when raising capital from investors, and why choosing the right early-stage investors is essential.

1. The Capital to Grow: One reason why small business founders should not be afraid of equity dilution is that it allows them to raise the capital they need to grow and expand their companies. Small businesses, especially in their early stages, may not have the revenue or profits to finance their own growth. By issuing new shares and selling them to investors, small businesses can raise the funds they need to invest in new products, equipment, or employees. This can help the business grow and become more successful, which ultimately leads to a higher valuation and greater returns for the original shareholders.
2. New Perspectives: Equity dilution often means bringing in new people, which can bring new expertise and perspectives to the company. When investors buy shares of a company, they often bring not just capital but also their experience and connections. This can be particularly valuable for small businesses that may not have the same resources and networks as larger companies. For example, an investor with experience in a particular industry or market may be able to provide valuable advice and guidance to the company, or help it make important connections. This could help the company to grow and be more successful, which will also benefit existing shareholders.
3. Mitigates Risk: Equity dilution can help small businesses to mitigate the risk of the company. Investors usually require a minority stake in return for their capital and thus limiting the dilution for existing shareholders, but providing a cushion for the company in case of unexpected events. This can help the business to be more sustainable in the long term, which will also benefit the shareholders.

While dilution does reduce the percentage of ownership held by existing shareholders, it does not necessarily translate to a loss of control. A well-structured capital raise can provide a balance between raising the needed capital and preserving the control of the small business founders.

A well-drafted Operating Agreement can protect founders when raising capital from investors by outlining the percentage of ownership and control retained by the founders, establishing protocols for decision-making, setting up protective provisions such as rights of first refusal, co-sale rights or buy-sell agreements, and providing dispute resolution mechanisms for any issues that may arise. It can provide clarity on the roles and responsibilities of all parties involved and establish a balance of power between the founders and investors, helping to ensure that the founders maintain control and ownership of the company even as they raise capital.

It’s also important to note that the potential return on investment for existing shareholders is not necessarily lower when a company issues new shares. It’s a common misconception that dilution means lower returns; while it’s true that the percentage of ownership decreases if the company grows and its valuation increases, the existing shareholders can still see significant returns on their investments.

Crucial Decision: Choosing the Right Early-Stage Investors

The right investors will not only bring capital but also valuable expertise and networks that can help the company grow and be more successful. A good investor can also provide guidance and mentorship to the small business founder and align with their vision for the company. On the other hand, the wrong investors can cause misalignment of interests, which can lead to conflicts and have a negative impact on the company’s growth and success.

Small business founders should not be afraid of equity dilution when raising capital from investors. While it’s true that it reduces the percentage of ownership held by existing shareholders, it also allows them to raise the capital they need to grow and expand their companies, bring new expertise, perspectives and can help mitigate risk, attract more sophisticated investors, and increase the valuation of the company. The team at Forte has the experience and expertise to help guide you through this process and we’re passionate about helping founders navigate the many challenges of small business ownership. 

Accounting and HR tools are essential for small businesses because they help manage and streamline important financial and HR tasks. These tools can help businesses track income and expenses, manage accounts payable and accounts receivable, process payroll, and handle HR tasks such as onboarding and performance evaluations. By using these tools, small businesses can save time and reduce the risk of errors, which can help them focus on growing their business. In addition, accounting and HR tools often offer integrations and automations that can help businesses streamline their processes and work more efficiently. Overall, investing in the right accounting and HR tools can be a crucial factor in the success of a small business.

Our Favorite Accounting Tools: 

QuickBooks Online

QuickBooks is a cloud-based accounting software that helps small businesses manage their bookkeeping and financial tasks. It offers a range of features that make it easier for businesses to track their income and expenses, generate financial reports, and manage their accounts payable and accounts receivable.

One of the key features of QuickBooks Online is its ability to manage accounts payable. Businesses can use the software to create and send invoices, track payments, and schedule recurring payments. This helps businesses keep track of their outstanding debts and ensures that they are paid on time.

In addition to managing accounts payable, QuickBooks Online also offers a number of other features that can help small businesses manage their bookkeeping tasks more efficiently. For example, businesses can use the software to track their expenses and create budget reports, which can help them better understand their financial performance and identify areas where they can save money.

BILL

Another tool that can help businesses manage their accounts payable is BILL, formerly known as Bill.com. BILL is a cloud-based accounts payable automation platform that helps businesses streamline their invoicing and payment processes. With BILL, businesses can create and send invoices, track payments, and schedule recurring payments, all from a single platform.

Bill also offers integrations with other financial tools, such as QuickBooks Online and Xero, which makes it easier for businesses to manage their accounts payable within the context of their overall financial management processes.

With BILL, businesses can set up custom expense policies, issue virtual credit cards to employees, and track employee expenses in real-time. This helps businesses better control their expenses and ensure that they are being used for business purposes.

Our Favorite HR Tools: 

Finally, small businesses also need to manage their payroll and HR tasks. One tool that can help with this is Gusto, a cloud-based payroll and HR platform that helps businesses process payroll, manage benefits, and handle HR tasks such as onboarding and performance evaluations.

Gusto

Gusto offers a range of features that make it easier for businesses to manage their payroll and HR tasks, including the ability to process payroll in multiple states, handle tax compliance, and offer employee benefits such as health insurance and 401(k) plans.

One of the key benefits of using tools like QuickBooks Online, BILL, Divvy, and Gusto is that they offer integrations and automations that can help businesses be more efficient. For example, businesses can use integrations to link their financial and HR systems, which can help streamline processes and reduce the risk of errors. Automations, such as recurring payments in BILL and automatic payroll processing in Gusto, can also help businesses save time and reduce the risk of errors.

In conclusion, QuickBooks Online, BILL, Divvy, and Gusto are all powerful tools that can help small businesses manage their bookkeeping, accounts payable, expenses, payroll, and HR tasks more efficiently. The integrations and automations offered by these tools can help businesses streamline their processes and save time, which can help them focus on growing their business.

The team at Forte Business Services has the expertise to help you and your small business manage each of these essential tools. You can read more on our Finance & Accounting or Human Resources pages to learn about how Forte’s services can help your business run smoothly so you can get back and focus on your forte. 

A financial pro forma is an indispensable tool for small business owners, projecting future financial statements to provide a clear forecast of performance over a designated period. This strategic resource not only facilitates proactive adjustments to safeguard financial stability but also plays a crucial role in securing capital. Effective pro forma statements can significantly enhance a business’s ability to attract investments or obtain loans by demonstrating its potential for growth and profitability in a tangible, well-documented manner.

At Forte Business Services, our financial team specializes in meticulously crafting pro forma statements, ensuring our clients possess a comprehensive understanding of their expected financial health. This insight is vital for making informed decisions and presenting a compelling case to potential investors and lenders.

To successfully create a robust financial pro forma for your small business, consider the following steps:

Gather Financial Data

The first step in building a financial pro forma is gathering all necessary financial data. This includes information such as past financial statements, budgets, and sales forecasts. It is important to have as much detailed and accurate data as possible in order to create an accurate pro-forma.

Determine the Time Period

The next step is to determine the time period for which the pro forma will be created. This could be a year, several years, or even longer. The length of the period will depend on the business’s needs and the available information.

Use a Basic Template

Once the time period has been determined, the next step is to create a basic template for the pro forma. This should include the three main financial statements: the balance sheet, the income statement, and the cash flow statement. Each of these statements has specific components that should be included in the pro forma, such as revenues, expenses, assets, and liabilities.

Build in Flexibility

When creating your financial pro forma, it’s crucial to incorporate flexibility, allowing for easy adjustments to assumptions as new data emerges. This adaptability is essential for maintaining accuracy in your financial forecasts and swiftly responding to market changes or unexpected circumstances. At Forte Business Services, our method for developing pro forma statements is designed with modularity and clarity in mind, enabling you to update assumptions without undermining the integrity of the projections. This approach ensures that your financial strategy remains robust and responsive, equipping you with the agility to seize opportunities and effectively mitigate risks as you steer your business forward.

Forecast Revenues

The first step in building the pro forma is to forecast the business’s revenues. This can be done by looking at past financial data and sales forecasts and considering any changes in the market or the business’s operations that may impact revenues. It is important to be realistic when projecting revenues, as overestimating them can lead to unrealistic expectations for the company.

One way to project revenues is to use a top-down approach, which involves starting with the overall market size and then breaking it down to the specific market segment the business serves. For example, if the business is a retail store that sells clothing, the first step would be to determine the size of the overall clothing market. Then, the business can consider its market share and expected market growth to project its future revenues.

Another way to project revenues is to use a bottom-up approach, which involves starting with the business’s specific sales data and then extrapolating it to project future revenues. This can be done using sales trends, such as the average sales growth rate over a certain period. It’s important to consider any changes in the business’s operations or the market that may impact sales, such as the introduction of new products or changes in consumer demand.

It can also be helpful to consider any external factors that may impact the business’s revenues, such as economic conditions, regulatory changes, or competitive trends.

Forecast Expenses

The next step is to project the business’s expenses. This includes both fixed expenses, such as rent and salaries, and variable expenses, such as materials and marketing costs. It is important to consider any changes in the business’s operations or the market that may impact expenses.

One way to project expenses is to use a percentage of sales method, where expenses are projected as a percentage of revenues. This method can be quick and easy, but it may not always be accurate because it does not consider changes in the business’s operations or the market.

Another way to project expenses is to use a budgeting method, where expenses are broken down into specific categories and projected individually. This allows for more detailed and accurate projections but can be time-consuming and require more data and analysis.

In addition to these methods, it is important to consider any changes in the business’s operations or the market that may impact expenses. This could include new product launches, changes in consumer demand, or regulatory changes.

To project expenses accurately, it is important to have detailed and up-to-date financial data, including past financial statements and budgets. It can also be helpful to consult with other members of the company, such as department heads or financial advisors, to get a better understanding of the business’s expenses and any potential changes that may be coming.

Why Pro Formas are So Important

Small business owners should build a financial pro forma, because it allows them to see how their business is expected to perform financially over a certain period of time. This can be particularly useful for planning and decision-making, as it helps the owner understand the financial implications of various actions and scenarios. A financial pro forma can also be used to communicate the financial expectations of the business to stakeholders, such as investors or lenders. Creating a financial pro forma is a crucial step that small business owners can take to identify possible financial risks or challenges. By doing so, they can take appropriate measures to address them. A financial pro forma is an effective tool to ensure financial stability and success for small businesses.

Knowing your financial needs are taken care of and in order is a relief that lets you focus on your best interests. If you’re having trouble, Forte can help you organize and optimize your finances so that you can focus on your forte. Head to our website to see how Forte’s finance and accounting services can help your business.