Topic: Always Have a financial record in whatever business you own - page 6. (Read 1400 times)

There are many more benefits of keeping financial records and I know it's not the most exciting part of your business but it is essential to your business. It doesn't matter how small your business is, be it, laundry, hair salon, boutique, online store, etc, always keep financial records.

I have always wanted to organize something like a free seminar and educate the owners of small businesses in my community about this but

I'm a very introverted and shy person so I don't know how to go about it, please I will appreciate ideas. 

As a small business owner, I learned the art of keeping financial records from my mentor. Because of his meticulous book keeping was secure funding for his business expansion from several financial institutions. He has over time been able to gain clarity about the next business decision from just looking at his books. They have been impecable.

As a small business owner, I learned the art of keeping financial records from my mentor. Because of his meticulous book keeping was secure funding for his business expansion from several financial institutions. He has over time been able to gain clarity about the next business decision from just looking at his books. They have been impecable.

If we focus on profits then financial reports are important, we don't know whether the products we are selling are profitable or at a loss if we don't have financial reports, the easiest thing is to use a computer or application so we can easily monitor financial conditions and target profits we will get.

It all boils down to having financial planning since it is important to track all your expenses and income so you can further assess the performance of your business. Having keeping records is one way to go since it could give you an image of the business' financial flows. I think in the situation of the barber, having personal financial planning is important since it could be a problem of how he personally manage his own money. It is important to any business and individuals to track their expenses and have financial planning so that they can really see what to do and also to view their standing in terms of financial secureness.

I had this barber friend in a neighboring hood I lived a few years ago who is a very good barber and has his own ...
... it, please I will appreciate ideas. 

Having a track record o every activities in your financial economy is very important, this helps in having an adequate planning over time, most businesses a d inventions do archive their data for future reference a d this serve well in this purpose for them to fast track on past events, record keeping is very important to any organizations because they work on their past records to be able to serve them when applicable.

Things that are considered small are things that are actually big things starting from that. Even large corporations have special staff to keep track of their finances. We're not kidding about this. I can be sure, try asking people who have been successful with their business. They will definitely answer the same thing that recording every income and expenditure is very important. And try asking people whose business is not running smoothly, they will surely answer that this is one of the reasons their business went bankrupt (maybe not all, but one of them).

Small details are also big details. Imagine if you missed to record $1 expenses in your business, which you continue to spend in a month so it would be $31 and it is huge already as it is profit, and if you analyze and check your income business then you fall short. Even cents should be recorded, no matter how small, so that you can see if business is going well or not. Even though it's kind of tiring to list it down, for sure you'll benefit from it in the long run.

What was the problem with this barber?
If you say that he has a good flow of customers and sufficient rates to make a profit, even after paying all taxes, then why did he have no money left, what was the problem?

Some people lead such a lifestyle that only keeping records will not help them, for this you need to learn how to plan a budget. Although accounting is very important in business, and after that he will see how much he earns, but if he does not change his lifestyle, does not reduce his spending, then he still will not have enough money for rent, because his habits are costly.

He will need to improve financial planning, and after he sees where and how much he spends, he will be able to understand how much he needs for a comfortable life, and in relation to this amount he will be able to plan his budget.

I had this barber friend in a neighboring hood I lived a few years ago who is a very good barber and has his own barbershop. He does home service from time to time too. He’s really good so he has a lot of customers but at the end of the month he always struggles to pay the rent of his shop. I spent most of my free time with him at his shop so I know the number of customers that walk in for a haircut daily and I know what his rates are, so by calculations, he should be making enough money even after rent and other expenses required to run the shop. So one day when he complains about rent I asked him how much he makes in a week and he couldn't tell me an estimated number.
Long story short, I educated him on how to keep financial records and record every single penny that comes in and goes out of his business. I also made him understand how this can help him cut losses and make more profit.

The point of this whole story is that I have encountered a lot of people who have small businesses and don't even bother about keeping records in their businesses and this single reason could be a hindrance to growing your business.
No matter the kind of business you do, you should be able to know if you are making a profit or running at a loss. After analyzing a distant relative business I found out that she was taking money from another business to sustain another business. In the long run, both businesses will go under. Not only does a good financial record help minimize losses but it also helps lessen the burden of your taxes.

You don't have to be a big corporation before you keep a record of your daily financial transactions. And no, it doesn't have to be a perfect or standard financial record or statement. It could be done in any way you and the next person will understand. It should just include all the money coming into your business and all the money going out of the business in whatever form. At the end of the day, you should be able to know how much you made in total, how much you have at hand at the moment, how much went to your bank account, how much is in the hands of debtors, how much you owe for bills and to your customers or any other person or entity.

An accurate financial record helps you;
Know the progress of your business: It's through the financial record that you know if your little business is safe or about to go under. If your business is safe your records will also let you know how safe you are. When your records have enlightened you on the future of your business then you can now make a decision based on what the financial records show.
Identify income sources and reduce unnecessary expenses: When you look at your financial records at the end of the month and you see the business not heading in the desired direction, then you do something about it, You can either start cutting down expenses that are not necessary or identify the part of your business that generate the most income and put more focus on it.
Allows you to attain complete regulatory compliance: I stated earlier that an accurate financial record helps with your taxes. Of course, you have to pay taxes, but you can't do that accurately if you don't keep an accurate financial record and that might put you and your business in trouble with the regulatory bodies in the future. Not only does our financial record help figure out your taxes but it also supports the items written on your tax returns.

There are many more benefits of keeping financial records and I know it's not the most exciting part of your business but it is essential to your business. It doesn't matter how small your business is, be it, laundry, hair salon, boutique, online store, etc, always keep financial records.

I have always wanted to organize something like a free seminar and educate the owners of small businesses in my community about this but I'm a very introverted and shy person so I don't know how to go about it, please I will appreciate ideas. 

What was the problem with this barber?
If you say that he has a good flow of customers and sufficient rates to make a profit, even after paying all taxes, then why did he have no money left, what was the problem?

Some people lead such a lifestyle that only keeping records will not help them, for this you need to learn how to plan a budget. Although accounting is very important in business, and after that he will see how much he earns, but if he does not change his lifestyle, does not reduce his spending, then he still will not have enough money for rent, because his habits are costly.

He will need to improve financial planning, and after he sees where and how much he spends, he will be able to understand how much he needs for a comfortable life, and in relation to this amount he will be able to plan his budget.

I spent most of my free time with him at his shop so I know the number of customers that walk in for a haircut daily and I know what his rates are, so by calculations, he should be making enough money even after rent and other expenses required to run the shop. So one day when he complains about rent I asked him how much he makes in a week and he couldn't tell me an estimated number.

I think making it mandatory for businesses to have a certain level of knowledge in financial records. That would help businesses take their financial record more seriously. People find it boring and to an extent I can't blame them because it's pretty uninteresting but it's very necessary.

A user gave me a similar tip. I have been editing videos and I have already started taking steps in making the semina happen.

That's a great idea, I think there is a lot of demand for such seminars among small business owners. In my country it's mandatory that all types of businesses need to keep at least a basic level of financial records. But many companies are struggling with it and when there is an audit happening there is a lot of panic. During university I worked part time in a tax office and saw first hand in what conditions these documents where. There were a lot stains on the paper and pages missing, which was a big problem because the government would always make unrealistic estimates. If you are struggling with speaking in front of strangers you could think about only making online seminars, then you would be sitting alone in your room and only have to engage via video with your clients. One problem is that many business owners don't pay much attention to the subject, it only comes to mind when there is an audit around the corner.