1 - Simple
Business is simple keep it simple.
2 - Funds Flow
The single most important financial statement today is a FUNDS FLOW STATEMENT. This shows the business where the money has been spent or where the money will be spent in the case of a forecast. Cash forecasts can clearly show the critical factors that will impact on a business in the future. Unfortunately very few businesses understand this simple technique or apply it correctly. In simple terms cash is King, it is a scarce commodity use it carefully.
3 - Key indicators
It is important to develop 3 / 4 key pieces of information about a business to provide an indication as to the financial position of the Business. Examples, Monthly Sales, Monthly Cash Receipts, Gross Labour Cost / Sales Ratio. The appropriate ratios vary from business to business. Your financial advisor can provide the assistance.
4 - Accounting Records
It is important to establish a reliable and appropriate accounting system. This provides the basis to monitor the financial wellbeing of the business in terms of cash flow and profitability. There has historically been good correlation between good financial records and profitability.
5 - Understand
If you do not understand a proposal put to you defer your decision until you do.
6 - E-mails
If you have to send a difficult or emotional e-mail, hold it for 24 hours and ask the question “Is that what I wanted to convey” if not change it.
7 - Control
You can only control those matters in your control. You need to learn to control your reaction and attitude to those that are not in your control. E.g. you can’t control the speed of a slow driver in front of you, you can control your attitude and response.
8 - Enduring Power of Attorney
If you have a variety of different assets you can appoint through a nominated person to manage your assets if you become temporally or permanently incapable. Talk to your solicitor and seek advice.
9 - Too Good
If it sounds too good to be true, then proceed with caution.