The Constant Entrepreneur: Advice for Running a Productive Business

Financial Data – You Can’t Run a Business Without It

Yesterday I met for a couple of hours with the owner of a small flower and gift shop. She has run the business for ten years, and has taken very little personal income from the shop. Early in the conversation I asked her how much the business grossed last year – she could not even give me a ball park number, nor could she produce any current financial statements. Her idea of financial control is to call the bank daily for the current checking account balance.

What I have found in my years of advising small business owners is that it is not uncommon for them to have absolutely no understanding of their financial condition. Is it any wonder, then, that there are so many business failures? With no understanding of sales, costs, and values, a business owner can not possibly manage for profitability. If the business is profitable, it is purely by accident.

At least this owner has a relationship with a CPA who files tax returns and balances her check book. This CPA, like many who work with small businesses, has missed the opportunity of being of true value to the owner. These CPAs fail to explain the financial information and fail to provide financial analyses that could help the business to be better managed.

This shop owner will probably keep prodding along for the next few years trying to pay down debt and keep the business running. But without a financial understanding and a financial plan, the business, by most standards, will never be a success. The business certainly will not have built any wealth for the owner.

Will Limkemann
Limkemann Business Advisors
440-871-0976
www.neobizadvisor.com
will@limkemann.net