With the rise of business competitions offering substantial prizes ranging from $10,000 to $50,000, it’s crucial to be ready to participate. Competitions like the Weatherhead 100, Inc. 10k Small Businesses, COSE, and JumpStart offer financial rewards and valuable exposure and mentorship opportunities. To stand out in these competitions, your financial information needs to be impeccable. Here’s how to prepare:
- Ensure Accuracy in Your Financial Information
Your financial reports must be accurate and well organized. This means having a concise chart of accounts with no duplicates and ensuring that transactions are correctly categorized. For example, expenses should be listed on the Profit & Loss (P&L) statement, not on the balance sheet. The balance sheet should typically only contain positive numbers; negative numbers for liabilities or assets indicate errors that need correction. The only usual exception to this rule is depreciation.
- Simplify Your Profit & Loss Statement
Avoid having too many income accounts on your P&L statement, as this can make your financial information confusing. Your financial reports should tell a clear story. If there are significant changes, such as a new pricing strategy that resulted in a 10% decrease in revenue, make sure to explain these in your notes. Similarly, if discontinuing an unprofitable product or service has positively impacted on your bottom line in the long run, but makes your financials look weak in the short term, it is important to provide the context.
- Highlight Additional Key Metrics
Include additional information that showcases your business’s progress, such as the number of customers per year, average spend per customer, and a decrease in accounts receivable days. These metrics can demonstrate effective management and growth.
Conclusion
Take advantage of the many opportunities available to earn additional cash, gain community recognition, and receive mentorship from an organization. By keeping your financial information up-to-date, accurate, and well-presented, you can make a strong impression in any business competition.
I hope you find this strategy as valuable as we have. If you have any questions about the financial reports and how the impact your business, Contact us today. We’re here to help!
