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Once upon a time, there was this entrepreneur who had launched his business. He was really passionate about his field of expertise, saw an opportunity in a competitive market, and started working very hard to make a difference.
2 years later, he called me. He had not implemented any financial tools since launch, apart from outsourcing the mandatory monthly reports to an accountant. He was facing significant cash-flow problems, had no idea what his company's financial situation was, and needed help to address those issues. He told me: "Now I understand the value of finance. If I do not do anything about it, I am going to hit a wall very soon." He had not looked into it before simply because he did not like numbers.
Does that story sound familiar?
As business owners, money should be your priority because you are ultimately responsible for your company's financial health. Growth requires cash, and cash needs to be managed. Nancy and Chris from Mango Tango Asia highlight its importance in this video:
There are 4 basic steps you should be taking:
1) Hire a Finance Manager
1) Maintain a cash-flow forecast file
2) Prepare an annual budget file
3) Look at the P&L file at least every quarter
If you want to properly run your business, allocate the right resources, control costs, make informed decisions, and plan for future expansion, then you need to integrate financial management in your skill set.