As a small business owner, you are probably familiar with having many roles and jobs. And as all small business owners know, operating appropriately in multiple roles and jobs is important for getting your small business off the ground and turning it into profitable. In case you are managing your personal or small business finances, you’re not alone. Almost 80% of small business owners in US do the same.
However, working in the role of chief finance officer doesn’t make you a financial expert – you may also be lost on the subject of the ins and outs of making a profit and loss statement or a cash flow statement. Although managing minimal financial expertise can save you some cash in the form of salaries, you could be damaging the long-term success and growth of your small business.
Small Business Knowledge Score
Wondering where are you currently standing in your business knowledge? Currently, Intuit has introduced a small business learning program. In this program, the quiz covers the major three divisions of questions on creating financial statements, accounting or financial terms, and applying data. The program offers learning resources and help users to answers and explanations for every question after completing the phase. It also helps you to compare your results with the businesses like yours in the industry.
Here are some of the questions;
Why Financial Literacy Is Important For Small Business Owners?
According to the recent survey conducted by QuickBooks, over and above 40% of small business owners classify as financially illiterate. Many small business owners possibly use the same concepts for governing both their personal and business finances – however these two objects are not always the same. Coping with business sales and appropriately tracking expenses are even more complicated in a business setting. Misinterpreting business financing terms and practices could probably lead you to the failure of your business.
How a Business Owner Can Improve Financial Literacy
As everyone knows that financial literacy is very important for running a business effectively – and we realize that almost half of small business owners in US don’t have the basic skills in terms of finance. However what’s the solution for that? How you can improve your financial skillset and knowledge?
In case you don’t have sufficient cash to hire a certified financial officer, your business finances are still your responsibility for the foreseeable future. It is on you to improve. And as per the survey, 60% of small business owners in US say they wish they knew more about finances. Fortunately, there are lots of resources available to help small business owners learn more about financial knowledge and management.
One more source of getting knowledge about small business finances is seminars and webinars. They are remarkably great ways to learn more about business finance on your own schedule to improve and revise your skills. You can find seminars through American Management Association. These seminars or webinars generally require a fee.
Additionally, you can personally hire a mentor for your help in finances. If you know someone who is a business finance expert, you can ask for his help. Learning from your or others mistakes is also an excellent way to improve your financial skillset. Reading finance related blogs, forums and watching tutorial videos is also an effective way to learn from financial obstructions and mistakes.
After you have completed the quiz program and have a better knowledge of your financial literacy level, you need to write a plan for managing your business finances – and make sure that your plan must have a timeline. The sooner you understand finance, the better your business will prosper.