A short YouTube talk by Bob Gauvreau outlining three critical mistakes business owners make when they lack accurate, up-to-date financial information: (1) making strategic/pricing decisions based on invalid or outdated data (example: construction/homebuilding pricing and rising costs), (2) pursuing acquisitions or capital investments without current fiscal-year financials—leading lenders to refuse financing, and (3) losing eligible tax deductions because of inaccurate or untimely bookkeeping. The video stresses maintaining accurate, rolling financial records to support pricing, investment, and tax outcomes.
Chapters
Something I get asked often is, you know, Bob, what are some of the mistakes business owners make when they don't have accurate and up to date financial information? Very first one is you're making strategic decisions based on invalid information. I'll give you a good example. If you're a home builder or you're in the construction industry, you're constantly taking on projects and you're looking at those projects and you're seeing how profitable they need to be. And you're learning from this because what happens is our prices tend to change on the cost of our materials, our labor costs tend to go up. You know, our insurance rates even increase, our vehicle costs, fuel, all of those elements are constantly changing. Without having up to date financial information, we don't actually know how we should be pricing these jobs. So we have to respond with our pricing and our changes in pricing strategy related to the costs that are coming in. We also always want to try and increase the gap between what we're charging and the cost of delivery. That's our gross profit margin. The higher that we can force this up, the more we can reinvest in delivering an extraordinary client experience and maximize the long term sustainability and profitability of our business. The second one that I'm going to highlight, the second area where is a mistake that businesses make because they don't have up to date financial information is going out and acquiring another business or acquiring a capital asset of some sort. You know, we look at, as a CEO in our business, we look at opportunities all the time. I constantly have opportunities to invest in making our team better. I've had multiple conversations today alone just to do that. And if you don't have good financial information, first and foremost, no bank is going to lend you money to acquire that asset. You have to have up to date financial information. You have to be looking at and predicting what the future profitability of your business is going to look like. And you have to have the most recent fiscal year end financial statements available. If you don't have those, no bank is going to take you seriously, which is going to miss you out on the opportunity to make a really good strategic investment for your business. So there could be thousands of different areas of how business owners are making mistakes. Those are two, and I'll leave you with one final one. If you don't have up to date financial information or inaccurate bookkeeping records, one thing that is missed all the time, and we hate paying too much tax. But if your records aren't up to date and they're not accurate, you're missing out on deductions that you would otherwise get in your business that would save you tax money up to date. Financial information and good bookkeeping is absolutely essential if you want to be successful in your business. So don't be one of those businesses that's making these mistakes. Let's get that up to date, accurate and rolling for you today.
