The language of business is money. How financially literate are you?
Studies of business failures show half of all new businesses are wound up within three years of launching. And that failure figure rises to nearly three quarters over the first five years.
Getting the right advice from the start can help you think through your proposed business plans and help you avoid making a bad investment – or becoming one of those statistics.
Most businesses fail because of poor management, inadequate cash resources or poor cash control. Going it alone without really understanding how money moves in and out of your business is a high risk strategy. A good accountant will be as committed as you are to making the right choices for your businesses.
Even if maths is not your strength, it is most definitely in your interests to learn how to cost your product, calculate profit margins, prepare budgets, and analyse and interpret financial statements – profit and loss statements, balance sheets, and tax returns. The effort will pay off in a much deeper understanding of the dynamics of your own business, and you will be in a strong position to manage your finances day to day and plan for growth.
And there’s lots of help out there. AusIndustry’s comprehensive website at business gov.au offers a range of tools and guidance through business requirements for all three tiers of government. The site includes resources for planning, growing your business and managing your finances, including valuing your business, succession planning and grant programs.
And now, Food South Australia, in conjunction with our sponsors Moore Stephens South Australia, has created an easy, simple to follow resource to get you started on upskilling for successful financial management.
Following our successful Fired Up Finance! workshop, Moore Stephens SA have developed a toolkit for food businesses who want to make sure you are getting – and understanding – the key financial information you need to plan a profitable future.
The kit includes four simple checklists covering the fundamentals of financial reporting, the role of cash in your business, costing and pricing food products, and finance for decision making. These checklists are a fast way to check that you are looking at the right financial information, and have all the information you should have, when you are planning for your business.