Financials

No one starts out building a house without a plan. In the same way, profitability is more likely when an entrepreneur creates a detailed plan. Without the big picture view, you can't put together the little pieces: If you have ever tried to put together a puzzle without the big picture on the box, you know what I am talking about. A budget is like the picture your business patterns

How would you like to someday retire from your business? That is someday build a business that affords you the time and money to enjoy the people and things you like to do outside business? I often talk to entrepreneurs and even though this is something they want, they never take the time to plan for it. They somehow hope that someday they will wake up and have a business

Be careful of accounting definitions The accounting definition of working capital = current assets – current liabilities. On the surface this has very little meaning. Current assets & liabilities could contain items that is not related to operations. Know your numbers so you know your business Working capital: Internal Vs External Working capital is used to evaluate the efficiency of cash management in meeting the demands of the direct cost of goods/

Do you know what your AR is costing you?   Why accounts receivable? Increase sales. Downside of Accounts Receivable Bad debt Opportunity cost of cash Additional staff required to maintain accounts Interest cost if business has to take loan to meet working capital needs Background checks/ collection services Office supplies like paper and ink sent to customers who owe Credit card and accounts receivable When you offer your customers the

To truly understand return on assets, you must first be able to differentiate between operating and non-operating assets. Operating Assets Operating assets are economic resources owned by the owners of the business. Operating assets are bought to generate future revenue and can usually be converted to cash in the future. This means they can potentially be resold after use. Operating assets often include: Cash – at a minimum your must have