NUMBERS, NUMBERS, NUMBERS
The exciting part of growing a small business is the marketing and product/service development; it’s the excitement of making a sale. On the other hand, the least exciting and the most overlooked part of growing a business is the “number crunching.”
Most small businesses have a great vision and dream about future success, yet less than 10 % of small businesses have a financial plan that mirrors that growth plan.
Unless you have the necessary tools and materials to build a house: hammer, nails, wood, drywall, flooring, plumbing, etc., you cannot complete a new home. It’s the same for business growth; your main foundation building tools have to be your financial projections and source of capital.
Yes, it’s possible to start and grow a business with very limited capital. If that is your situation, then devise a plan of action around that limited financial capability. Forget about the large corporations that have never had a profit, they have investors with deep pockets which will allow them the necessary time to tweak their products/services and to develop alternative marketing plans. Very few small businesses have that luxury.
We are all born with different thinking abilities, but we aren’t born with accounting and budgeting skills. We learn them by recognizing their importance and allocating the necessary time to learn and to understand how they form the “bones” for a successful business.
Perhaps the COVID environment has provided us with a small benefit. We have the time to learn about the importance of accounting in a growing business. A good start is to search the internet; there is a lot of good basic information to get you started. Many books share basic information on accounting and its application to a small business. Technology has also helped; there are many awesome, easy to use and understand software packages.
My advice is to first understand basic accounting terminology and how it applies to the different phases in the development of a business. Ideally, once you understand and acknowledge its importance then you can hire, even part time, someone to start keeping your financial records on a system such as Quick Books. Armed with that knowledge you can concentrate on the overall growth of your business.
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