Very often, we see entrepreneurs talking about organization and management skills with expertise, but we’ve seldom come across one who is confident about their finances. Otherwise, entrepreneurs hire accountants to manage their business numbers because you’d rarely know someone who is both financially literate and an entrepreneur. Unpopular opinion, but it is essential to have a high degree of financial literacy to establish a business for several reasons:
It doesn’t matter whether you’re starting an edtech or a furniture business; in your early days, you need to focus on attracting maximum clients. It is your initial years and earliest dealings that pay off in the longer run, which means that you must definitely invest in customer management. But how would you know what to invest and how to invest when you have just started out, and funds are so limited? Particularly in solely sales-based businesses - like a bakery or a coffee shop? You will most probably require hiring a full-time accountant and paying a significant amount even though sales aren't high initially. This is why your financial knowledge will help you arrange, plan, devise and organize strategies for the overall management of your finances with minimal help.
Most people become entrepreneurs out of a liking or passion, especially when they are good at something. Students studying home sciences end up opening a bakery, a software engineer might open up an online grocery store and so on. The thing is, when people are good at something, they open up businesses with the desire to work freely, i.e., without having someone boss around. At the same time, they want to build a business that builds them. For this, they need to strategize efficiently. And how is that possible? There are no shortcuts in the pathway to success, and one needs to be good with finances to gain success at new businesses. When you understand what financial reports mean, you can strategically grow your business when you can gauge key indicators and predict quarterly sales. Your own knowledge and skills as a financial planner determine the initial success of your business.
As an entrepreneur, you have control over the managerial decisions of your business, but what about the financial ones? You have to rely on a Chartered Accountant every time you want to make an investment, or apply for loans, or buy new software and so on. What if we told you it isn’t that difficult? Thanks to #ACCA online study courses, you can now become a Certified Accountant and control your finances independently. Once you can grasp the nitty-gritty details of balance sheets, profit-loss statements, budgetary details and more, you can formulate long term plans for your new business and facilitate more sustainable growth. This will save your time and money both while you’d be learning to manage finances yourself.
● Knowledge of financial reports, profit-loss statements will help in planning long term investments.
● Understanding the difference between profits and losses, cash flow, and investments will facilitate better financial planning.
● Easy monitoring of income and expenses in the business
● A solid grounding of stocks, business growth strategy and sales conversion
● Better awareness of taxes and investments
To sum it up, as an entrepreneur, your business success solely depends on your financial literacy. If financial management scares you and you haven’t been good with numbers, stop looking further, enrol today to #Study ACCA with Global APC and experience high-quality ACCA Learning with our trained faculty and friendly staff.