Fiscal Physical

As part of the Northwest Professional Development conference that was held earlier this month for SBDC’s in Oregon, Washington, and Idaho, Business Resource Services presented a portion of their Profit Mastery® lecture series on financial management. The day centered on ways to prevent business failure due to poor financial management. BRS noted seven “financial killers”. 

Carl Forssen, our presenter, said that it is often common for small business owners to assume that if they can make it and sell it, they will survive. The managing of and the decisions regarding the structure of finances are often left to the accountants and bankers. Now it is wise to use experts to aid in decision making and analysis, but the owner should be involved with the financial management. 

 

Mr. Forssen recommends giving your business a fiscal physical; look at things like contribution margins, variable vs. fixed expenses, break-even analysis, and simply using the balance sheet and income statement together to track the flow of cash. Business owners should go through this process at least semi-annually and preferably quarterly. 

 

BRS has developed a financial Road Map to aid in this process. After you have identified areas where your business may be weak, you can find the weakness and track back to potential causes or work forward to what will happen if the problem isn’t corrected. (Read more about the Road Map analysis).  Just like personal health, financial health is developed through consistent monitoring and careful attention to the details; crash diets, sporadic exercise, or quick-fix surgeries rarely work for physical or financial health. For more tools, visit BRS’s Critical Issues Toolkit . Or gather your financial statements, and visit your Idaho SBDC consultant to help you with your financial review.