Small Business Financials

Small Business Financials

A recent study of small business owners conducted by Intuit uncovered surprising results. The study found that 40% of small business owners consider themselves to be financially illiterate. At the same time, 81% of them are doing their business finances themselves. Lets break these numbers down. If 40% are financially illiterate, and 81% are handling their own finances, this means that 32.4% of those handling their own finances are ill-equipped to do so. The number of small businesses operating in 2010 was 27.9 million. Therefore, a total of about 5.9 million businesses are operating without a strong financial rudder. Understanding your business finances helps ensure you can withstand downturns. It will allow you to take advantage of opportunities that arise and increase the business’s chances of succeeding.

On the other hand, if you are financially illiterate, your business will eventually run into problems, such as allowing expenses to increase to a point where profits are minimal. In some circumstances, business owners fail to include the correct amount of taxes on their profit and loss statement. Failure to understand federal and state tax requirements or to keep accurate records can lead to trouble with the Internal Revenue Service (IRS), your state, or both. Understanding these requirements and keeping proper records can minimize your risk of being audited or penalized by the IRS. Having clear and complete business records will increase your chances of success if you are audited by the government. At the start of a business’ lifecycle, suppliers want fast payment for inventory. If your products are sold on credit, it can be months between the time of making a sale and getting paid.

Learn to Read a Profit and Loss Report

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What you will learn

• How to read financials in a small business
• Profit and Loss
• Balance Sheet

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Level: Beginner Level

Duration: 1 hour

Instructor: Jacob Malousek