Do You Have A Financial Compass?
Regardless of where you’re at in your entrepreneur journey, one of the most critical components of a successful business is financial stability. While it's vital to have the business's structural foundation, as discussed in a previous blog, adopting sound financial practices is necessary to create a firm financial foundation.
Well over 50 percent of businesses fail within five years. Of those that fail, 85 percent fail within the first two years. Poor financial management is the primary reason for failure. This is one of the many reasons why getting a handle on your finances is crucial.
Many aspiring entrepreneurs either fail to recognize the importance of a firm financial foundation or choose to ignore it for one reason or another. I get it. Money talk is rarely a comfortable topic for people. Still, it is a crucial component in building a business that is profitable and sustainable.
Money can be taboo, and very few first-time business owners have experience managing small business financials. Because of that, one of the core principles I teach is the Financial Compass. I want to help you better understand business financials and help ensure that your business doesn’t just become another statistic.
Through my work with aspiring entrepreneurs, I’ve found many simply don’t know much about:
- Expense Tracking
- Managing Cash Flow
- Identifying and Eliminating Leakage
- Maximizing Deductions
- Pursuing ALL Available Tax Advantages
Small business financials are different and more complicated than personal financials. Many people are just not familiar with the ins and outs of fiscal matters. They don’t know what the numbers are telling them, what to look for, and what they need to understand. Without knowing these things, opening up your statements can feel like you’re looking at a foreign language.
But it doesn't have to be confusing. Once you understand your financials, it will help your business in the long haul. Adopting or implementing sound financial practices will put your business in the best position to be profitable and solvent over the long haul. And that’s what all aspiring entrepreneurs want – a profitable and sustainable business.
I understand that this might seem overwhelming, but you CAN do it. I’ve worked with many business owners to put them on the path to financial stability. If you'd like help or want to have a conversation, please schedule some time with me or shoot me an email at firstname.lastname@example.org.
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