2. Need not be Scared We all should have a foundation in understanding finances Allows you to be proactive rather than reactive Relevant for almost everyone: Business Owners Project Managers Professionals (Attorneys, Accountants, Consultants, etc.) Running a Political Campaign
8. Balance Sheet Section-1: Assets What do you possess of value (cash, receivables, fixed assets, etc.) Section-2: Liabilities What do you owe (payables, loans, etc.) Section-3: Equity Owner’s activities Historic performance Assets = Liabilities + Equity
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10. Income Statement Section-1: Revenues Tracking monies flowing in Section-2: Expenses Tracking monies flowing out Section-3: Net Income Revenues less Expenses Positive is GOOD Negative is not so good
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12. Cash Flow Section-1: Inflows Understanding expected cash coming in Section-2: Outflows Understanding expected cash going out Section-3: Net Cash Inflows less Outflows Positive is GOOD Negative is not so good
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15. ROI Return on Investment Always know what every dollar spent is worth to your bottom line Be able to answer questions such as: What did spending $10k in advertising do to my revenues? What did adding a sales person do to my revenues? What was the bottom line effect on spending $50k on automation? How did spending $25k in PR increase my visibility?
16. Running a Successful Business Retail, Law Firms, Consulting, Political Campaigns – They are all businesses 4 Simple Steps: PLAN REPORT ANALYZE IMPLEMENT
17. Planning Before a single dollar is spent on an idea, develop a business plan and strategic plan. Focus your thoughts and validate your vision. Planning includes budgeting and cash forecasting.
18. Reporting Produce financial statements on business activities Balance Sheet Income Statement Statement of Cash Flows Produce relevant reports on your business: Page views and sales conversion rates for internet businesses Velocity reports for inventory based businesses Billable hour details for professional services
19. Analyzing What are your reports telling you? What are your margins? Assess ROI for monies spent.
20. Implementing What needs to change based on your analysis? Always be proactive, but react to what your reports are telling you.