Wednesday, April 16, 2014

Where can you find information about key financial numbers used to run a business?

Where can you find information about key financial numbers used to run a business?
Contact the Small Business Association in your area. They have guides to preparing business plans. You can also get assistance from your banker. Keep one important thing in mind that these sources tend not to emphasize. Bankers don't like to see "outgo" numbers that are not offset by income so in business planning, things like shrinkage aren't looked on favorably- and If you don't understand the reality of shrinkage and it is not factored into your profit structure, you can find yourself under capitalized. If a 3% shrink factor is considered the norm for your particular business - for example - that 3% which comes right off the top might be the difference between your being able to pay yourself - or meet your personal obligations and you could easily go under. Ask a new business owner what his shrink is and 9 out of 10 can't give you a number or even understand what it is. That is just one of the expenses that comes out of the gross.

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