Episode A1.003 Business Financial Terms

IBGR - RESULTS Radio Network. Everything a business owner needs to start, grow or exit a business. COME GROW WITH US.

Introduction
Here we are in the last week of July and the first month of the 3rd Quarter is ending - how much closer are you to success?

If you have been with us all month, you know we have been railing against the politicians and bureaucrats for acting arbitrarily in response to the pandemic; and any illusion they are making data-based decisions should have been dispelled by now. This is not about a specific political party or group, it is about the arbitrary use of power at the expense of the most important global community - you.

People like us, Living the Life, employ 57% of the planet's population and yet are treated as the source of its problems. Not here, we celebrate the contribution you make to a better society and our focus is to improve your chances of success. 

This week we continue the new programming structure. We use a Balanced Scorecard to format our weekday shows: Finance (Monday) = Operations (Tuesday) + Sales (Customers) + People (Employees) with Fridays dedicated to Owners. Look at the week this way - Monday through Thursday is working IN the Present, Friday is working ON the Future.

Also, we just built a new community, our version of a Chamber of Commerce. Join Up and gain access to our Hosts and access our library of best practices.

Have a great business week.
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Show Objective
The focus of this week’s show is on Business Financial Terms. Entrepreneurs start a business with a variety of pre-existing skills. Some business owners are natural salespeople, while others have the ability to come up with ideas that sell themselves. Whatever skills you bring to your new business, the truth is that only a handful of entrepreneurs are truly financially savvy. The majority of new business owners cringe at the thought of preparing financial statements and managing the books of their small business. Even if you hire an accountant and especially if you utilize accounting software, it’s still important to have a basic understanding of the inner workings of your company’s finances.

Which leads us to our show topic today. There are some basic financial terms every entrepreneur should know as you grow your business. These terms may come up in meetings with potential investors, partners, and clients, so it’s important to be aware of them and to understand how they might affect your business.
 
Your Money Mindset
As we continue to work on building a healthy money mindset, return again to the book “Think and Grow Rich.” Last week we visited the 8 steps you can use to train yourself to be persistent. 

Today we will look at the four simple steps to develop the habit of persistence. Why are we spending so much time in one chapter of an old book? Because every successful business owner has developed this habit of persistence and too many others don’t even know it’s a habit they need!

Four simple steps that lead to the habit of persistence:

1. A definite purpose backed by a burning desire for its fulfillment.
2. A definite plan, expressed in continuous action.
3. A mind closed tightly against all negative and discouraging influences.
4. A friendly alliance with one or more persons who will encourage you to follow through with both plan and purpose.

What You Need to Know
*Running a successful business involves more than just the act of running the business. It also includes continuous learning. This applies whether you’re a rookie entrepreneur just starting out with a great idea for a new business or a more established small business owner with a quickly growing business that needs to expand. You should always be learning as a business owner, no matter where you are in your career. There is always a new tool to master, new problems to solve, and new vocabulary to understand.

In order to not get totally overwhelmed, it’s helpful to take things one segment at a time. That is why we have designed our programming with daily doses of learning for each stage of business growth. 

When it comes to business finances and financial terms, you don’t have to be an accountant or a financial planner to be successful in the world of business finance. Here are some business terms and finance terms that will help you find your way to successful small business accounting:

1. Assets
2. Liabilities
3. Balance sheet
4. Bottom line
5. Expenses
6. Cash flow
7. Cash flow statement
8. Profit and loss
9. Income statement
10. Net profit
11. Gross Margin
12. Costs of sales
13. Capital expenditure
14. Working capital
15. Equity
16. Accounts Payable
17. Accounts Receivable
18. Depreciation
19. Gross Profit
20. Bootstrapping

 
What You Need to Do:

1. Spend the rest of this week becoming familiar with the terms discussed today
2. Set up your first accounting records. It could be a spreadsheet or you might want to start with one of the many accounting software programs available. We will cover these options in depth on Episode A1.007 on Aug 24.
3. Get confident discussing your business’s financial needs. Knowing the “language” of business finance is an integral part of your job as the owner.
4. Set aside time to listen to the shows in the other Finance stages of business growth. 

Previous Show: EPISODE A1.002 WRITING A BUSINESS PLAN
Next Show: A1.004 Registering with Country, Federal and Local tax organizations

Written by: Donna Kunde

* I am not a CPA and the recommendations given in this show do not constitute legal or financial advice. Seek professional advice for all legal and financial matters. 

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