Blaine Bertsch is a Co-Founder of Dryrun, where he oversees business operations and product design.
We asked Blaine for his financial advice for small business owners. Here’s what he shared:
Can you tell us about the mission behind Dryrun? What are some of the pain points you’re trying to help business owners solve?
Dryrun help businesses bring clarity to the future of their finances.
Many financial tools focus exclusively on past occurrences but the success of business rides on what is coming in the future. Dryrun’s unique, scenario-based approach combined with its intuitive and highly flexible interface allows users to quickly model out different “what if” scenarios.
From dealing with cash flow issues and budget planning through to building and monitoring sales projections, Dryrun helps businesses in the trenches as they wrestle with operations and direction.
Often used in collaboration with accountants and advisors, Dryrun is a simple-to-use and highly visual cloud tool that offers the best way to build cash flow projections, budget plans and sales pipelines while viewing them all in one place.
Dryrun even integrates with other popular business tools to import data and speed up business processes.
When should small business owners consider purchasing software to help manage finances and cash flow?
The No. 1 reason businesses fail is due to insufficient cash flow. This type of mismanagement sits at the core of the problem so this makes tracking and forecasting absolutely essential for growth.
Small businesses need systems in place right from the get-go, but a simple spreadsheet can offer a low-cost option at the onset when cash flow is relatively straight forward.
As a business grows, finances may become too complicated to forecast effectively with a simple system. At this point it may be time to look at alternatives that will offer efficiency and provide the necessary flexibility.
It’s also important to have a broader view of your finances than just “cash flow.” Often business owners focus on a small part of their finances, such as when to expect sent invoices to be paid, but many fail to see the big picture of how their ongoing budget will change as they grow and how their sales will look three months, six months, or a year from now.
What are the important considerations to make when purchasing software to manage finances?
Each business will have different needs and areas of focus that will drive them forward. It’s important to do an in-depth analysis so that you have a solid understanding of your business pinch points and opportunities to improve efficiency.
It’s very unlikely that a single software will cover all of your needs, but fortunately, the ever-growing suite of cloud-based tools can fill in the gaps. Your accounting software generally sits at the center of your financial system with other programs connecting to push data back and forth. This system helps reduce data entry and keep everything up-to-date.
The variety of online business software can assist with anything from managing inventory to budgeting, from invoicing and reporting to cash flow and sales forecasting, and any number of other key functions. Many can even be custom configured to suit the unique needs of your business.
Once you have your system up and running, you can experience some major efficiencies, time-savings, oversight and direction at a modest cost.
What are the most common mistakes you see business owners make when it comes to managing finances?
The error I see most often is the failure to make their finances the highest priority. Often businesses focus almost exclusively on sales and operations, believing that they can just stay ahead of the wave. This method of thinking is not only a dangerous approach but also one that can cost a business a significant amount of money as they are not accurately viewing the big picture.
Even a modest amount of time dedicated to setting up an efficient and focused system along with regular check-ins and updates can resolve many concerns before they become critical. Cash flow crunches can be avoided, capacity issues identified ahead of time, dips in sales and opportunities for growth can all be discovered through regular reviews of your financial forecasts.
What are the short- and long-term costs of these mistakes?
The immediate result of failing to manage financial forecasts is often seen in missed payments.
Late receivables that result in cash flow crunches can lead to significant stress points such as loans with heavy interest expenses and wasted time spent dealing with banks and creditors, while paying suppliers late can lead to damaged business relationships, the loss of key suppliers, high penalties and a trickle-down effect that impacts a wide range of business operations.
Over the long term, the cost of ignoring the future of your finances can stunt growth, limit revenue potential, and cause missed goals, lost opportunities and in the worst-case scenario, a failure to be profitable and inevitable business closure.
What should businesses be doing to avoid these mistakes?
Adequate lead time paired with an understanding of the short- and long-term issues a business faces are critical for taking action.
The first step is understanding exactly what challenges your business is experiencing. Regular attention to your finances will keep you grounded and provide clarity.
That said, knowing what you are dealing with is only half of the equation. Your ability to address issues head-on requires time. Banks need time. Lenders need time. Suppliers need time.
Knowing what obstacles are approaching well in advance will help mitigate this issue.
How has the way businesses manage cash flow evolved since you started you started your career?
Businesses often managed their cash flow in one of two ways: primarily a spreadsheet, and sometimes operating just “by the seat-of-their-pants.” Prior to cloud tools that could be connected offering a complete view, there were few options for managing cash flow efficiently.
As flexible and useful as spreadsheets are, they can present some significant challenges and gaps. From broken equations through to version control issues and lack of integration, data inaccuracies can plague small businesses.
But even more critical is the user experience.
Spreadsheets can be quick to build and easy to follow for very simple sets of data, but as needs grow and more factors are included, spreadsheets can turn into a “Frankenstein” of mismatched data. This complexity can become a tower of cards – ready to collapse at any moment.
New cloud tools such as Dryrun are simple-to-use, powerful, integrated and highly visual. That means efficient and effective decision making, collaboration and business clarity.
What advice can you offer small business owners on better managing their finances?
Initial set up of these tools can take some time but the pay-off can be inspiring and business-changing. Once you have identified your key pinch points, start with tracking and addressing the core issues. Continue to add additional information and sophistication over time.
With just a small amount of dedicated time every week, you will be able to build and evolve a system into a living document that serves as an early warning indicator, a gauge of near-term business health and a road map for long-term growth.
What small business trends or innovations are you following right now? Why do they interest you?
The trend towards highly focused cloud-based tools that connect together into a tailor-made system for individual businesses is an area that is bursting with potential! There is so much that can be done to make businesses easier to run so owners can focus on the most important aspects – creating a product or a service that serves their customer base and keeps them coming back!
With Dryrun, we aim to be a key cog in many companies’ core suite of tools that will help them tackle their specific issues, improve operations, increase profit margins and provide unlimited growth!