Fiancial Management

FINANCIAL MANAGEMENT

Is managing your finances the most important part of your business?

Perhaps that may be true?

Perhaps that may not be true?

Weigh both sides of the argument!

While managing your finances may appear to be the most difficult part of owning your own business, proper financial management may determine your success or your failure in business. There is no single rule of thumb to determine either the success or the failure of your business, in terms of financial management.

Consider these thoughts with respect to good financial management.

1. The first step in financial management, is not the first dollar that is front and center or foremost, although financial management is often considered from that perspective.

2. If the focus of financial management is purely on the dollar, to the exclusion of all else and everyone else, the business cannot and will not succeed. In fact, it is destined to fail.

3. The 'flame of the entrepreneurial spirit' is often extinguished, by focusing solely on the dollar value of a company.


Answer These Questions About What You Think Constitutes Good Financial Management

1. Consider first, what your reason is for starting up and running your own business. Is it something that is going to be of benefit to someone else as well or is it just going to be of benefit to you? If it is only going to be of benefit to you and to no one else, is it likely to grow? Why should it grow or be allowed to grow at all?

2. Consider your idea in relation to your business plan. Is your idea sound, or is it likely to collapse partway through your business plan, simply because of poor financial management? Is your plan for financial management, destined for success or failure? If it is predestined to fail, why waste your time starting a business at all? If it is destined to succeed, then carry on. Begin to build your business!

3. Taking into consideration, all of the factors that you know may or may not constitute good financial management, ie. weighing all of them, one against the other, is the scale tipping in your favor or is it not? All of these factors must be considered, plus others that you may not be aware of, when you initially start up a business.

4. Have you set a financial goal or financial goals, for your business? Will your financial management in relation to your business, lead you to the goal or goals that you have set, or will they fall short, because in actual practice they are not realistic? Is it time to generate some more realistic financial goals? Do you need to change your financial management strategy? If so, proceed to make the necessary changes.