5 Challenges of Not Knowing Your Business Financials
Update: 2016-03-02
Description
Episode Overview
Many businesses fail. One of the leading reasons is because they don’t understand how to read and properly utilize their financial reports. Many entrepreneurs think that these are only needed for tax time, but that could not be further from the truth.
So on today’s episode, we are going to walk through five challenges that arise when you don’t understand and use your business financial statements. Additionally, we are going to share several real world examples of these from our various businesses.
Episode Key Points
- The differences in our businesses before and after we began understanding and leveraging our financial statements (hint… after is MUCH better)
- Reviewing your financial statements on a consistent basis can help you identify problems much sooner
- The more frequently you review your financial statements, the easier it is to understand and explain the story that they are telling
- Creating a “Cashflow Forecast” will help you look ahead and identify months with extra cash and months with deficient cash
- Understanding your margins will help you create more profit
- Once you know your margins, there are several strategies that will allow you to increase your margins
- Trying to grow your business without understanding the numbers will cause more stress and struggle than required
Links and Resources Mentioned in the Episode
- Our Free Facebook Community for Entrepreneurs (Request Your Access)
- Gusto (The payroll provider that saved us $900+ a year on our payroll expenses)
- Margin Calculator
- Introduction to the 3 Main Financial Statements (Free Download)
- Rental Real Estate Property Calculator (Free Download)
Episode Free Download
Episode Transcript
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| Ariana: | This the Serial Startups Podcast show 27. In the previous episode we discussed passion and whether you need to be a successful entrepreneur. Today we kick off our miniseries on understanding your business finances, starting with some of the impacts when you don’t understand your financial statements. Are you looking to start a business but need a little more guidance and support to really get it going? If so then we invite you to join our Startups Academy for we have created a ton of resources and step by step guides to help you determine which business you should start with, how to launch it quickly, how to growing it to being profitable and automated so that you get your time back. |
| Welcome to the Serial Startups Podcast where we bring you the real deal when it comes to masterminding a business, juggling personal relationship and a busy household. We are your hosts and serial entrepreneurs, Tom and Ariana Sylvester, and this is the podcast for people who want to get more out of life. We want to show you how to build multiple streams of income and get on the fast track to being your own boss. Join us as we talk about our ideas, successes, and failures both in business and in life. | |
| Tom: | Welcome back to the Serial Startups podcast. If you guys are joining us for the first I’m Tom. |
| Ariana: | I’m Ariana. |
| Tom: | We are serial entrepreneurs. Part of the reason I say that is because the topic we’re getting into this month is not the most popular topic. It’s basically understanding your business financials. Before we get into that, the format of this podcast is basically each month we pick a theme and then we spend 3 episodes really diving deep into that theme to help you implement practices in your business that are going to help you out. We just finished a theme of productivity and how you could be more productive. Like I said, the focus this month is really going to be on understanding your business financial statements. |
| If you guys have a topic that you want to hear about, something that will help your business, head on over and join our private Facebook community. While you’re there you can hang out with other great entrepreneurs, you can learn and you can also contribute. If you are interested in that head over to sscommunity.co. | |
| Ariana: | Okay so, business financial, sounds like a super fun topic. |
| Tom: | Like I said it’s definitely not the most interesting topic, but it is critical for being able to be successful in business. Part of the reason we’re talking about this is we’ve seen so many entrepreneurs that fail in business, or you hear about all the businesses that fail. One of the major contributors to that is people don’t know their numbers. |
| Ariana: | Let’s talk about the early days of our businesses. Check number 1, we had to keep putting our own money in the business to cover expenses. |
| Tom: | How did that make you feel? |
| Ariana: | Not good. |
| Tom: | Yeah, especially because I don’t think I had you sold on being an entrepreneur yet.</t Comments In Channel   Download from Google Play  Download from App Store  United States00:00 00:00 x   5 Challenges of Not Knowing Your Business FinancialsTom and Ariana Sylvester: Serial Entrepreneurs, Business Coaches and Parents |