Feature Article - How Do I Use my Financial Statements to Improve my Business?

Clear Thinking  - This is Small Business Week.

Coming Events

Objectives
 

You start with having clear objectives of what you want to accomplish in the short term.  Make it more manageable for yourself by working on one part of your business at a time.

Financial Statements
 

I divide financial statements into 3 categories:

1) Historical documents like Income and Expense Statement and Balance Sheet.  These both tell you how you did.

2) Future documents like an Income and Expense Projection tell you how you think you will do.

3) Working documents like a Cash Flow help you manage your cash in the present and near future.

A Budget uses historical data to project into the future how much you think you will spend and should be used regularly to help you manage your expenses in the present.

When reading your financial statements, pick out the information you want to follow relating to the parts of your business you want to manage now.  I know some people read the newspaper cover to cover, but most turn to specific sections depending on their current interests.  You may read a different section now and then if it contains something important you want to follow.

Compare
The value in your numbers comes from comparing them to last time, or to how you thought they would turn out or to how they change as compared to other numbers.

For instance, if you want to lower your telephone costs, you would look at that line on the Income and Expense statement to see if it has gone down this month compared to last month. 

If you budgeted $X for phone, you will read your statements to see if you are higher or lower than that.

If you know that the more long distance calls you make, the higher your sales you might want to work on lowering your phone cost per sale.

The reason you should use your financial statements to follow this information and not your bills is that your financial statements will contain all your costs.  For instance, you may have bills from your basic phone service, long distance carrier, internet, cell phones, phone cards, or make calls from hotel rooms or other places.

Use the Information
Once you have seen how you are doing, use the information to adjust what you are doing.  Work to continually improve your business

This is the essence of my Financial SMARTS program. Read your..

Statements for specific...
Measurements so you can...
Assess how you are doing.  Use the information to...
Re-examine your business practices and come up with new ideas to...
Tackle and this will lead you to...
Success.

If you want more information about how you can use this program to improve your business performance, contact me.
 

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Email us at feedback@cleartoyou.com.

This is Small Business Week.  It’s a time to give ourselves a pat on the back for all our hard work and to recognize how many there are of us.  On my short little lane in Kentville, there are more small businesses than households. 

Small Business Week is organized by the Business Development Bank of Canada (BDC) and endorsed by the Canadian Chamber of Commerce.  The purpose of Small Business Week is to celebrate the contributions small businesses make to the Canadian economy – and, as the BDC describes it, to “provide established and prospective entrepreneurs with training and development opportunities, and create a forum for networking and sharing ideas”.

The theme of Small Business Week 2005 (developed by the BDC) is “YOU'RE THE POWER behind the Canadian economy, let's share the energy!", a theme that’s particularly apt when you remember that “small businesses generate nearly half of the country's GDP and are responsible for six million jobs” (Bill Downe, Deputy Chair, BMO Financial Group and CEO of BMO Nesbitt Burns).

Take the opportunities this week to connect with other business owners. 
 

1. This is a great time to come to the Lunch & Learn this week.  Jeffrey Hosick of Creative Management Solutions will show us how we can monopolize our marketplaces.
2. The VWBN presents “Lives Behind the Stories” a night to celebrate women on Thursday evening.  I have one ticket left and there will be some at the door.  I’ll be there so come by to say hi.
3. The week wraps up on Saturday at the Wandlyn for the All Things Valley Expo sponsored by the local Chambers of Commerce and Board of Trade.  I’ll be presenting my new Financial SMARTS program as a supplementary Lunch & Learn at 12:15. 


I’ll be there with bells on and I hope you will be, too.

See  the Events Page For these new Events:

October 20 - MYM Marketing

November 3 - Negotiating With the Pros

November 17 - Networking

December 1 - Marketing Brainstorm

December 15 - Christmas Party

December 5 - Financial SMARTS for Small Business