Understanding your business' finances
You have decided to start your own business. You have opened your doors and are selling product and services. Everything is going well.
There's one problem: As the business owner, you feel as if you should be bringing in more profit and cash than you are.
You look at your financial statements to try and pinpoint a problem. However, viewing columns and rows of numbers is similar to that of attempting to read Greek or Latin.
Is this you? Perhaps you somewhat understand the numbers present in your financial statements, but you are not completely sure where those figures derived from and what actions you should consider in order to increase or decrease them. Is this you?
Consider your financial statements the business' EKG. It can help you identify when your business is healthy and when there could be an underlying problem. It is a vital component of your business' health and it is important that as a business person you are able to interpret the results.
Your financial statements can act as tools to make better decisions for your business. They act as a report of the past and can assist in making future decisions.
Our area is experiencing quite a bit of growth and opportunity. As business owners, or even key managers, it is important that you are able to manage the level of growth that is occurring. You can do this through understanding the business' financial statements, such as the cash flow.
When you understand your cash flow statement, you can forecast, review past trends and effectively control the cash that is flowing through your business.
In turn, this will open up an understanding to your Income Statement and Balance Sheet.
The counselors at the University of Houston-Victoria's Small Business Development Center have participated in a financial program titled, Profit Mastery. The program teaches how to "demystify" your finances and use them to your advantage as the business owner or a key manger. The program supports the idea of "keeping it simple."
Some of the key topics that the program highlights are:
• How to properly plan.
• The importance of monitoring your company's financial position on a regular basis.
• Identifying your business' strengths, weaknesses and opportunities.
• Understanding and managing your business' break-even point.
• Managing and understanding your cash flow, cash flow trends, and cash flow needs.
• Managing growth in your business.
• Planning your exit strategy.
The UHV SBDC will be facilitating the six-section, four-day course during the month of October. The program is designed to enhance the financial management skills of all business people - business owners, key managers, lenders, and business advisors, to name a few.
Driving financial performance in your business is an important factor in achieving success.
For more information regarding the program, please contact the UHV-SBDC at 361-485-4485 or firstname.lastname@example.org. Additionally, the program provides 16 hours of CPE credits for CPAs. Seating is limited.
Lindsay Young is a certified business advisor at the UHV SBDC.