What would it feel like if you were driving down the road and all the car’s gauges and information was either not working or in a foreign language? It would be pretty scary.
Unfortunately there are a lot of small business that are driving along in just that situation. A business’s gauges are its balance sheet, profit and loss statement and statement of cash flow.
Often business think only of financial statements at the end of the year when either the bank asks for them or a tax return needs to be filed. Financial statements can be so much more.
What can financial statements show you? How about:
- Can my business sustain a substantial drop in business due to a disaster? (Are my shock absorbers good?)
- How well will the business do against a sudden competitor? (Are my tires good and aired up for a race?)
- What is the earning power of the business? (What is the horsepower?)
- How efficient are the business processes? (How many miles per gallon am I getting?)
- How large of a loan will the business need to expand? (How far can I drive on the gas I’ve got?)
- Where did my cash go and, more importantly, how can I get it back? (I keep putting oil in my engine
- – why?)
These are some of the topics business advisers at the University of Houston-Victoria’s Small Business Development Center address with small businesses every day. It has become such a important part of running a business that UHV SBDC offers a course to answer the questions above.
For more information on the course, “Profit Mastery,” go to uhvsbdc.com or call 361-485-4485.