Financial Terms – Every Entrepreneur Should Follow

With a variety of built-in skills, entrepreneurs go into business. Some of them are of salespeople, while others have the ability to come up with ideas that sell themselves. However, in this handful of entrepreneurs, few of them are financially savvy. The mainstream cringe at the thought of organizing financial statements and managing their books.

Business owners should hire an accountant or utilize accounting software in order to simplify the Business finances. In addition, there are some basic financial terms shared by Richard Kassel that every entrepreneur should know to grow their businesses. These terms may originate in meetings with potential investors, partners, and clients. That’s why it is significant to get familiar with them and understand their effect on your business.

Business Management Tips: Here it is!

Assets

A business has economic resources, including the products it has in inventory, the office furniture and supplies purchased for use, and any trademarks or copyrights it owns. These assets determine the value of a business. However, if business experienced difficult times that can be helpful.

Liabilities

Any debt accrued by a business in the course of starting, growing and maintaining its operations like bank loans, credit card debts, and monies owed to vendors and product manufacturers. Richard Kassel categorized Liabilities into two major types: current, which refers to immediate debts (e.g. money owed to suppliers), and long-term debt, which refers to liabilities (e.g. loans and accounts payable).

Expenses

In order to operate, the company incurs expenses each month including rent, utilities, legal costs, employee salaries, contractor pay, and marketing and advertising costs. In order to stay financially stable, a business should keep expenses as low as possible.

Cash Flow

Cash flow is the flow of funds through your business each month, including income and expenses. Businesses track general cash flow to determine long-term solvency. A business’ cash flow can be determined by comparing its available cash balance at the beginning and end of a specified period.

Financial Report

A financial report is a comprehensive account of a business’ transactions and expenses. Usually, created to give a business oversight of its financial matters. A financial report may be prepared for internal use or external sources, such as potential investors.

Cash Flow Statement         

For a specific period of time, the report that shows the entered and exited money of your business is called as cash flow statement. Richard Kassel shared its four categories: operating activities, investing activities, financing activities and supplemental information.

Profit and Loss

In order to stay financially healthy, a business must have a regular profit that exceeds its losses. However, the profit and loss are analyzed through the income statement.

Accounts Receivable

The amount received by a business from its clients. Usually, the client is notified by invoice of the amount owed, and if not paid, the debt is legally enforceable. On a business’ balance sheet, accounts receivable is often logged as an asset.

The Bottom Line

In a business journey, a business owner doesn’t necessarily need to be a financial expert. However, these basic financial terms from Richard Kassel are important at the time of conversation with colleagues, potential clients, and investors. Through financial reports and budget maintenance, a business can increase its chances of success.

Originally Posted: https://richardkassel.wordpress.com/2017/09/21/financial-terms-every-entrepreneur-should-follow/

Business Management Tips – To Avoiding Unwanted Headaches

As soon as you start your small business, make sure to prioritize your goal. Knowing what and when to do – are some initial steps of your startup.

Especially, when one gets started in business – he/she doesn’t have enough experience to make smart decisions, educated guesses. Hence, business management tips and advice from others can be incredibly valuable.

 

Richard Kassel

Here, a leader cum entrepreneur Richard Kassel shared some significant business management tips that guarantee help small business to manage your business better while avoiding unwanted headaches.

Let`s get deep to push forward the progress you want!

An LLC

If you`re self-employed, don’t incorporate any employee, and are 100% self-funded from your own pocket, the decision of setting up your business as a separate taxable entity is a supreme preference.

Professional service providers, including writers, designers, and coaches often overlook these steps while focusing more on ramping their client base. But the advantages of instant protection to your personal assets from any business troubles, such as copyright issues or some client issues can make an imperative option of your business management tips.

Headaches saved:

·         Business financial troubles seeping over into your personal finances

·         The IRS breathing down your neck

·         Getting sued for everything you own

Personal & Business Finances

Let’s imagine: Setting up a legal entity isn’t an option for you!

Even bank demands official business paperwork to open your business’s name otherwise, you won`t be able to make business transactions.

According to Richard Kassel, getting your LLC paperwork is something you have to do.

Since you and your business are separate taxable entities. You must require separate finances otherwise things will get messy and you might not have assumed. Willingly or unwillingly you have to deal with an audit—even if you’ve got nothing to hide.

Headaches saved:

·       
 More trouble with the IRS

Invest in Your Education

Indeed, the best money you spend on business is - the education for it. Richard Kassel found it quite silly to keep trying to Google solutions, go through trial and error with an aim to understand things better.

Instead, make it simple by paying a few hundred dollars to have someone who’s been there, done it, and been successful at it teach me how to do it right the first time. However, free courses are available, but they only scratch the surface. Paying money to dig deep into the topic and really learn it goes so, so far.

Headaches saved:

·         Wasted time

·         Wasted money

·         Failed experiments

·         Leaving sales on the table

·         Googling for 13 hours straight while your eyeballs bulge out of your head

Marketing Investment

Simply, putting your website live or an “Open for Business” sign on your front door isn’t enough to get your customers.

Instead, you should follow Richard`s advice included in business management tips - learn to invest in marketing. All it entails - a little research to find out what works best for your business model and your market:

•   Renting a booth at a festival
•    Online content marketing
•      Ads in the newspaper
•      PPC ads in Google

Network marketing and referrals

Suggested by Richard Kassel - Whatever you choose, start doing it from day one, but make sure in a right way – as it helps you start building hype, loyalty and anticipation from day one, simultaneously lead to business growth.

Headaches saved:

·          
      Sore thumbs from too much twiddling

·         Zero cash flow

·         Going into debt because of no income

·         No funds to pay yourself or your employees