Good Morning and Welcome to Finance Fridays with Baron “BSmart” Howard. Very recently I hosted the BSmart Holistic Entrepreneur Coaching teleconference in which we discussed Financial Literacy and the application of such knowledge to small businesses. With the current economy, there is no doubt- a need to improve financial literacy especially among those in the business sector. You may have the best business idea or the most innovative products and services. However, if you do not have the essential financial knowledge in managing the money your business makes, you are in for a rough ride. Businesses and individuals alike must make complicated financial decisions throughout their daily lives. Sadly, the volumes of research which explore aspects of financial and debt “literacy” among individuals and small business owners show that a growing portion of the population lacks the understanding to make these (financial debt and literacy) decisions. Not everyone who started or who is just planning to start their business has taken up finance courses. Sure, there may be some subjects which taught us the basics of accounting and personal finance but would that be enough to successfully run a business? Questions surrounding this issue often focus on the educational aspects, and the positive impacts which might be created through greater levels of understanding of accounting fundamentals and the basics of financial management. Particularly in smaller businesses, where there is a much closer relationship between business and personal finances, understanding even basic financial concepts is likely to lead to “better financial decisions and household well-being”. Financial literacy is a skill which can be acquired. You do not have to be a certified accountant but you need to be able to understand how well your finances stand despite a volatile economy. Any person who is running their own enterprise and is accountable for it can be called an entrepreneur. But not all entrepreneurs can be called financially literate. Financial literacy goes beyond just knowing what goes on in the financial world, it is about understanding finance so that effective decisions about the business can be reached. Entrepreneurs should set aside time to have a handle on the financial perspective in running a business. It is not enough to be blinded by opportunity. Just because you know how good you are in marketing does not necessarily mean that your endeavor will succeed. It would not unless you know how to make effective decisions regarding the financial aspect of your business. Keeping personal and business finances separate should be the first rule in managing business finances of any size or type. Treat your business as a separate financial entity with its own receivables and expenses. You may personally lend money to your business or withdraw money from your business, but those transactions must be purposeful and clearly documented. Yet the fact is, most entrepreneurs rely on accounting professionals to handle the financial side of the business. It is not wrong to delegate this task. In fact, it just might save you time if you do so. However, since you are accountable for your own business, it should go without saying that you have to know enough about your financial statements and whether your company is generating profit or if it is just making enough to break even. When it comes to the money generated by your company, you should be at the forefront and not the sidelines. An entrepreneur who could understand and assess their business’ own financial report would be able to ask appropriate questions related to their finances and would not be left in the dark. As the owner of your own enterprise, financial literacy is important so that you would not be the last one to know if your business is folding or growing. With financial literacy, there is an increased potential for your enterprise to develop into a large corporation. With BSmart Holistic Entrepreneur Coaching, we can help you to take a serious approach to achieving your goals and endeavors and help you to create a success plan for your purpose. Inbox me today for an assessment. Not convinced…? Please check out my FREE BSmart Holistic Entrepreneur Coaching Call on Tuesday’s from 8pm-8:30pm. That’s right…FREE 30 minutes. Here’s an opportunity for you to lay it on the line and experience the quality of BHEC Coaching. Also, check out my radio talk show “Relationships Matter”, with yours truly Baron BSmart Howard and co-host Shauntise “The Regulator” Howard. Here is an open forum where we the topic stimuli for the show is about the ‘9 people activities’ from the book entitles “The Isis Papers” by Dr. Frances Cress Welsing, an African American psychiatrist currently practicing in Washington, DC. The “Relationships Matter” show attracts a mature genre in which relationships are discussed on professional and personal levels ranging from entrepreneurship, marriage, dating, bonding and networking. And don’t forget, it’s time to “BSmart” about everything you do!
Posted on: Fri, 29 Nov 2013 14:00:00 +0000