When I started my business, oh, so long ago, I knew virtually nothing about managing a company’s finances. About four years into it, I famously had a ton of money in the bank to brag about, but it’s only because I didn’t pay my taxes. The feds found out, and that big pile of money went right out the door to pay the taxes and the penalties.
It wasn’t totally my fault. I came from the corporate world, working for others who took care of all these pesky little details. The Internet hadn’t been invented yet, so it’s not like I could tune into a YouTube channel to learn the ins and outs of managing the finances of a small, growing business.
One day I was in Corporate America; the next, I was an entrepreneur. Like most small business owners, I was the jack-of-all-trades who didn’t know the first thing about financial literacy, cash flow, profit & loss or taxes.
I had started my creative agency because I wanted people to pay me to make stuff up for them. I did this in the corporate world, so why not go out on my own? I had no plans to be a multi-million company. I just wanted to make some money without having to answer to someone else.
I was such an innocent. I had to answer to lots of people, including the taxman. I had to learn the fine art of cash flow, balance sheets, business credit and managing risk the hard way – making tons of often costly mistakes.
This is part of the reason why I started working on a new financial literacy series on MyStartup365.com. It’s based on materials originally created by the Small Business Administration (SBA) and the Federal Deposit Insurance Corporation (FDIC), so you can trust it’s good stuff.
As I was putting this financial literacy series together, I couldn’t believe how little I knew, even after running a business for 20 years. I wish I knew then what I’ve learned now by putting this series together. Maybe I would have been a multi-million company.
I tried to include knowledge tracks that would be the most helpful to a small business without putting you through days or weeks of mind-numbing lessons. If I missed something or if a module seems way too complex for the average person to understand, let me know.
Here’s a brief overview of what you can learn in our Mastering Financials series:
Module 1: Financial Management
In the day-to-day of running a business, a lot of money flows in and out. The danger to the business is not knowing if that money is working for you (profits) or against you (losses). This module walks you through various finance tools such as balance sheets, P&L statements and cash flow projections and how to use them effectively for your business.
Module 2: Recordkeeping
Keeping proper and accurate records not only helps you keep track of your business’ operations, but also reduces the chance that you will run into problems if you are audited or sued. This module walks you through the many ways you can keep and store records.
Module 3: Cash Flow
Cash flow is all about optimizing your finances, using various control points to increase the flow of revenue into your business (new markets, increased sales, etc.) and reduce costs (carrying less inventory, having multiple suppliers and such). We’ll take you through the cash flow funnel and the things you can and can’t control.
Module 4: Building Credit
Good personal and business credit go hand in hand in building creditworthiness for your business so you can qualify for loans, lines of credit and other financing. This module examines the effect credit scores and credit reports have on your ability to secure credit for your company and how to improve your standing.
Module 5: Banking Services
Many small business owners shy away from banks, either because of mistrust or a lack of understanding of how a bank can help them succeed. This module explores the benefits of building a relationship with a financial institution, the products and services that are available to you and what you should consider when choosing a bank.
Module 6: Financing Options
You need to have money to make money, as they say. This module walks you through the various ways you can finance your business, inventory, equipment or expansion needs with various lines of credit and loans.
Module 7: Tax Planning
Whether it’s local, state or federal taxes, it’s important to understand your various obligations and how to maintain your accounts so that your tax funds stay separate from the money you use for daily operations.
Module 8: Risk Management
In this module, we look at the internal and external risks that can impact your business, identify and assess different kinds of risk, and mitigate risks, either by reducing the likelihood they occur or the impact they have on your operations and bottom line.
As with most of our programs, our financial literacy series, Mastering Financials, is free to Washington businesses. There’s no need to register. The MyStartup365.com website is open 24 hours a day, seven days a week, so that you can go through the materials at your leisure, including our Entrepreneur Academy and Small Business Playbook. The only thing that is missing is a Degree in Small Business to print out.
Somewhere north of the Emerald City, still struggling with the lasting effects of the New Math Movement,