Monday, April 6, 2009

Part 2 - Can a profitable company go out of business?

So how do you find out what your financial position will be in the future? How do you know you will have enough cash to survive? How do I know when I have to borrow money?

It is difficult to have answers to these questions, especially if you are operating more than a week behind today or even yesterday. But, you can change that!

All owners need to understand Finance. It doesn’t have to be complicated. You are putting yourself at risk if you don’t understand where your numbers come from because people may take advantage of you, employees, accountants anyone. You just don’t know who it could be because you don’t understand what you are looking for.

Finance people spend most of their time looking ahead

In Finance, we look ahead utilizing the history of your company for at least the past 3 years or longer if you have an unusually good or bad year in your averages. You are the owner, you are going to have a good feeling on what your costs are. Take the time, study them, and understand them. How do I study? When do I have time? How do I do it? I have more to come. See Part 3.

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