Let’s talk openly for a moment, at eye level and without embellishing reality: How many times have you found yourself standing in front of your computer screen, looking at your bank account and saying the following frustrated sentence: “I work like a donkey, the business is full of customers, so how come I don’t have money in my account?!” 🤯 

This sentence is probably the most painful sentence I hear from small and medium-sized business owners who come to me for business consulting and support. They arrive exhausted, feeling like they’re running in an endless loop of putting out fires. On the one hand – there’s work, there’s sales, the phone is ringing and the calendar is full. On the other hand – the 10th and 15th of the month arrive, and suddenly they discover that they need to “bring money from home” to pay their VAT or pay their suppliers. 

The truth is? It’s not because you’re not good at what you do. You’re excellent professionals. The problem is simply that no one taught you how to manage your business finances properly. 

Often, businesses invest huge amounts of capital in attempts to increase business sales or build complex campaigns, but if your financial infrastructure is damaged – no amount of marketing will help, and the money will simply continue to leak out. Proper financial management is not a matter of complicated math, it is a matter of habits, changing a diskette, and a simple tracking system. 

After many years of accompanying companies and organizations, I have distilled for you the 5 golden rules of financial management that will put your bottom line in order, and make you stop being afraid of the bank: 

1. The sacred separation! The business account is not your private wallet 💳

Mixing your business bank account with your personal account is the number one cause of financial loss and financial blindness. As long as you pay for groceries at the supermarket with your business credit card, or pay the supplier with your personal account, you really have no idea whether your business is making a profit or losing money. 

When people look for a recommended business consultant, the first thing they will do with them is order and discipline: the business is a completely separate entity. Open a separate bank account, set yourself a fixed monthly salary that is transferred to your personal account, and don’t touch a shekel beyond that.

1. Profit-based pricing, not market: Don’t be “like everyone else” 📊

A common mistake is to set the price of your product or service just because “that’s what everyone else is charging.” When you do this, you are gambling with your financial future. 

In order to understand how to increase sales in your business and still leave a real profit in hand, your pricing must be scientific and rigorously calculated. It must cover the variable expenses, the relative share of fixed expenses (rent, software, marketing) and leave you with a clear and clean profit percentage. Pro tip: When calculating your gross profit, always make sure that the calculation is made from the price minus VAT, and not from the full price paid by the customer! 

1. Cash flow is king (not the income statement) 👑

Here lies the biggest pitfall: a business can be super profitable and successful “on paper” (in the accountant’s reports), but actually close tomorrow morning simply because it doesn’t have liquid cash in the till to pay suppliers or employees. 

The reason for this is usually a cash flow gap – customers pay you on a regular basis plus 30 or 60, but your expenses are coming out now. Working properly with a business financial advisor will teach you to build a simple cash flow plan, which anticipates account movements and gives you complete peace of mind.

1. Mapping fixed versus variable expenses (know the break-even point) 🔍

You must know exactly how much it costs you to keep your business open each month (rent, property taxes, salaries, retainers), before you have even sold a single product or service. These expenses are your fixed expenses. 

Once you map these numbers accurately, you can derive the “break-even point” of the business – how much you must sell each month just to cover expenses (get to 0) and at what shekel do you start to truly make a profit.

1. Planning vs. Execution: Don’t Wait for the Annual Report ⏱️

Many business owners only discover their true financial situation a year later, when they receive the annual report from the accountant. At that point, it’s too late to fix things.

Managing companies or running business consulting for small and medium-sized businesses requires dynamic, daily monitoring. You must set a predefined monthly budget, and check again every week: Did we meet our revenue goals? Did we exceed our expense items? A 10-minute weekly monitoring will completely prevent “surprises” at the bank. 

The bottom line: Marketing brings customers, financial management brings money 🎯

Many businesses come to me for marketing advice or seek a sales improvement consultant, thinking that “more customers” will solve their problems. But the truth is, advertising and marketing cannot fix a broken business model or poor pricing. 

To stop guessing and start managing your growth with confidence, you must master your hard numbers. Combining a business strategy consultant with sound financial management is the key to moving from putting out fires to building a business that consistently makes money and brings home money.