![]() It also makes it easier to grow a team, to make a profitable, successful business to achieve the goals that you're looking to grow. Ultimately, it allows you to unlock a level of control in your business that very few businesses get. ![]() It brings confidence to the decisions that you're making. Understanding where your money is going, how it's moving, where it's coming from in the first place.Īnd that allows you to create clarity about where you are going to go, how you are going to guide the business as the owner. One of the most important parts of understanding how your business finances behave is unlocking the story behind them. What we've found is that directionless businesses are most prone to failure because they're simply existing with no plan or goal for the future. Having a financial plan, how you're going to spend your money, understanding what next month might look like based on projections from previous months, it allows your business to create direction. They're maybe checking their bank account every once in a while to ensure that they still have cash in the bank. They're not looking at their finances at all. Most small businesses operate by the seat of their pants. When we understand where our cash goes, it can help us actually implement a lot of strategic planning, can unlock better decision-making, and ultimately it can help us to grow our businesses faster. In some cases, we're selling a product, and other small businesses are selling a service, and those service-based businesses are creating money in exchange for their time, whereas product-based businesses are exchanging a product for money.Īt its core, understanding business finance and unpacking business finance helps the owner of the business or the operator, the entrepreneur, to understand the story behind where that money comes from, and then ultimately where it goes, how that money gets spent, redistributed back to the owners, reinvested into the business, whatever it may be.įinancial control in itself, understanding that business finance bleeds into how we manage our money, where it goes, how we spend it, and what we do with it. When we talk about finance, we're talking about money, obviously, but what money means and where does it go? How does it come into our business in the first place?īusiness finance is really just the practice of allocating and managing money as it flows into the business.Įvery business's prime directive, every business at its core, is meant to make money. What exactly is business finance? What does it mean, and why is it helpful? Now, in order to get started, I think we really just need to define our terms. What does it mean? Why is financial control so important for small business owners? And the best practices for understanding the foundations of financial management and business finance in general. ![]() ![]() So today on the Profit Plot, we're going to be diving into the basics of business finance and unpacking our Beginner's Guide to Business Finance. Which totally makes sense.Īccountants think strangely they think within the system of accounting, and that is a foreign language to most people.īut it's a language that, if you have a very basic understanding of, you can get a whole lot of value from. You know, as an accountant, we see lots and lots of people, lots and lots of small business owners specifically, that just don't understand the complex world of business finance and accounting. On the Profit Plot, our goal is to help you unlock your small business's financial story by unpacking one complex financial topic at a time. I'm the CEO and co-founder of an accounting firm called Amarlo, where our goal is to help small businesses understand their financial story. Welcome to episode one of the Profit Plot.
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