Not knowing the numbers can put your small business in financial jeopardy

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Do you know the key financial numbers in your business? How well do you know them? If woken up in the middle of the night, could you give a pretty accurate estimate of where your business sits financially?

Without control over the financial and operational numbers in your business you really are operating blind. Knowing the numbers allows you to see potential problems before they occur. You can also operate and run your business with confidence knowing where you are going.

A report from Canada showed small-business owners were lacking in basic financial knowledge that could help them better manage their companies. The report said that while 93% of entrepreneurs surveyed did believe they have an average or even advanced understanding of financial management principles, 39% failed a 18-question financial literary quiz. About 57% achieved a score of 50% or less. With small businesses struggling to be profitable and competitive, this isn’t a good sign, said one of the people who ran the survey. Continue reading “Not knowing the numbers can put your small business in financial jeopardy”

Cut costs to the bone

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By now if you haven’t cut costs in your small business, it’s about time you do so. Would-be start-up owners need to plan their business using a low-cost model. Small businesses with a lower cost base stand a better chance of survival in this recession.

Cost cutting can start anywhere. I know of one business woman who looked at her inventory and realised that she didn’t know exactly how much stock she was losing. Stock was disappearing through untrustworthy staff. So she implemented daily stock taking. This soon gave her far better control and awareness of just how much she had lost. She could put in preventative measures. Continue reading “Cut costs to the bone”