The Importance of Understanding Your Finances
The ability to understand your finances as a business owner is a vital part of success. Without this skill, you run the risk of losing profit – and on an even more drastic scale – you could lose your business as a whole.
As a business coach with over a decade of experience working with business owners and another 17 years as an executive at one of the nation’s most dynamic companies, I know the ins and outs of business. In these years, I’ve learned one of the greatest struggles many business owners face is finances.
When it comes to understanding finances, there are a few factors to consider: profit and loss, balance sheets, and cash flow. Let’s break them down:
A profit and loss statement is essential to keep track of your sales and expenses. These should be done frequently in order to stay on top of finances. Many businesses complete these monthly, quarterly, or yearly.
A balance sheet tallies up all of the assets, liabilities, etc. to give a general picture of where a company is positioned as far as finances go. Similar to a profit and loss statement, these can be prepared monthly, quarterly, yearly, or any time a business is looking into their finances.
A cash flow statement aggregates all cash inflows and outflows a company sees regarding ongoing operations, business activities, and investments. These should typically be assessed every month, as expenses can change on a monthly basis. However, in some cases, doing a cash flow statement quarterly works for some businesses.
When combined, these 3 financial tools are the key to keeping your business profitable, increasing longevity, and making room for new opportunities and growth.
I’ve been delivering proven processes, methods, and systems to my clients for nearly 2 decades. Whether the goal is to secure your legacy, increase your cash flow, build a great team, put a strategic plan in place, or to free up your time, I can provide the guidance, accountability, and tools needed for success.
Ready to bring your business to the next level? Contact me today to see the value I can bring to your business.
In the meantime, take my Business Health Check Assessment to find out just how healthy your business is!