Tweet

Know Your Financials Like The Back Of Your Hand

Written by: Casey Gollan

Article Overview: Business coach. As a business coach I show business owners how to know and understand their financials. In this article I explain how knowing your financials will help you become a better business person.

Know Your Financials Like The Back Of Your Hand

You know what I find funny?

Most people start a business so they can enjoy the benefits of the ‘extra’ money and wealth that owning a business can create.

Yet many business owners have no idea about understanding their own financial statements. And that’s where their money is!

To me it’s such an irony.

And it’s something that I definitely rectify with every client I work 1-on-1 with.

By the time they’ve finished with me – they know their financials like the back of their hand… in fact they showing their accountants a thing or two…

Over the years I have noticed that most small business owners don’t look at or understand their financial statements.

This can be for any number of reasons.

Maybe your accountant hasn’t taken the time to explain it to you.

Maybe you don’t want to learn them - after all who did understand math’s at school, or enjoyed doing it?

In my experience I have found that the typical business owner starts a business because they have the drive and the personality to influence and convince people.

And I have found that on most occasions, not all, that type of a personality doesn’t enjoy doing paperwork and financials.

And that’s okay… but to make it as a successful business owner and add another million or so to your business - I suggest that you really become excellent at reading and understanding financial statements.

Because the best and wealthiest business owners do.

As with any area of your business – you should know what you’re doing – but it doesn’t mean you have to do it.

So employ people to do your financials – but you’ve got to have the knowledge and the experience to know that the people that you are employing are doing it properly.

And this is certainly the case with your businesses and your personal financials.

If you don’t know how to read and understand them, you’ll wind up in big trouble with them at some point in your career… be assured of that.

So start now.

Don’t fall into the trap of LEAVING it to your accountant. It’s the biggest mistake you can make. You should be doing it WITH your accountant.

If you have an accountant now that you started with, the chances are that your business is heading into areas that they are not as competent in. Because when you started business – your business was small and you probably weren’t making great money. So you probably hired a ‘lower end’ accountant at that time.

And that’s fine. You just need to know because as your business grows this ‘lower end – accountant’ may not have the skill set to cope with your growth.

It’s like different levels of sport.

Take for example football.

There’s local football, inter-district football, state level football, and National Level football.

As the level increases – so does the expertise needed by the players, the coaches and the administrators.

And so it is with Businesses.

It’s the same with me.

My skill set is excellent with taking $1 million businesses up to $2 to $5 million. I can work with businesses that are smaller than that, or that are bigger than that – but I’m perfectly suited to the niche of taking $1 million business to $2 to $5 million.

So I concentrate on businesses in that niche.

Above this mark, or below it comes a whole new set of skills that I don’t particularly want to be involved in.

Now back to you…

You’ve got to take an active role in creating your financials.

Ideally you should know all your expense categories so that for any payment made in your business you know which category it should go into.

And you should know all your allowable tax deductions. Like the back of your hand.

It’s your business, your money and your life – so control them.

You should also have up to date and accurate financial statements.

Some of these statements you should be looking at daily. Some weekly, some monthly. Some quarterly.

And you should be actively involving your book keeper and your accountant in this analysis. So that you’re all up to date and focused on growing the business.

It’s what all top business owners do, and it’s what helps them to continue to grow and prosper – so that they can not only grow their business – but enjoy the rewards that only a well controlled and profitable business can provide.

On my 1-on-1 Business Coach Program I’ll take you through a process that will have your head spinning with how easy it is for you to understand your accounting reports. And how easy it will be for you to understand your financial position.

I’ll also take you through the best ways to work with your accountants so that you are kept up to date and accurate so you know exactly what’s going on in your business all of the time.

It’s such a refreshingly simple ‘demystifying’ process that all of my clients love once they’ve learnt it because they really know where every cent of their money goes. It gives them more control and understanding of their business.

They all realize just how important knowing their financials is for their business growth and success.

Know your financials like the back of your hand.

Copyright © 2006 by Casey Gollan. All Rights Reserved



Business Coaching expert Casey Gollan helps grow businesses by $1 million to $10 million in 1 to 3 years. Since 1996 his coaching programs have added over $375 million to small businesses. Go to his Melbourne Business Coaching website and watch a free business growth video series.

Related Articles
  How can I Tell if My Bank is Financially Stable?
  Want to sell your business? This is how to prepare
  Don't Adjust My EBITDA
  Why Does My Lender Need a Business Plan?
  Business Planning – how should I handle financials?

Article Tags:



Related Forum Posts
Re: THE SECRET TO SUCCESS IS ALL IN YOUR HEAD...RIGHT NOW!!! - Success = Thinking (Head) + Heart (Feeling / Interest) + Hand (doing/ action). Success - H3 Robert
Re: I'm Back - Welcome Back! Hope you are doing great and looking forward to hearing from you.. Jude
Re: $8 website turns into a million-dollar empire - This is great inspiration for all of us. I would love for Ashley to come to the forum as well. Maybe give us the scoop on why she started and how she made it successful. Back to StumbleUpon. I also use it and find that I'm getting a decent amount of traffic from it. Alan
Show the Benefits - Offer a free test drive of the Product or Service with a Money Back Guarantee - Take the Risk out. This will help them make the decision but you have to work with them to realize it by explicitly state the benefits they are receiving.
Where to find angel Investors. - Back in 2001, I got a $25,000 investment from an angel investor, and it came from a very likely source... Family Member Sure I had an advantage because of relationship, but I didn't have to look very far. So the first place I would start looking is in your circle or extended circle of family and friends. If no one there has the funds that you need then I would recommend getting a list of the top business owners in your local area and pay them a visit with your pitch on point.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

The five pillars of internet marketing strategy

Join Conversations Politely, Part 1

Fighting the Saw-Tooth Affect

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.