Why take the time to learn and use financial management methods? Accounting is the language of business, so you and other parties (banks, IRS, etc.) should all speak the same language. Stay on top of your cash flow: Track money in and out of your business. Even a profitable business can go bankrupt if it doesn’t track cash flow. Manage your customers and sales: Track what they are buying, keep records up-to-date so you can contact them Production & Inventory: Know how to obtain goods and services from your vendors and establish credit Once your records are centralized, you can create reports for a variety of important activities: Filing with the IRS Understanding how your business is doing (this will help on pricing products and services) Sharing your financial picture with third parties (banks, SBA, etc.) to secure loans And then of course, tracking the money going in and out of your newly larger business. All companies, even huge established one’s with billions in revenue and tens of thousands of employees rely on financial management for these six areas. Whatever your business, sound financial practices are a toolset that can help you get the greatest return from your efforts.
• ‘entrepreneurship is a process through which individuals identify opportunities, allocate resources, and create value. This creation of value is often through the identification of unmet needs or through the identification of opportunities for change’
An entrepreneur is one who always searches for change, responds toit and exploits it as an opportunity. Innovation is the basic tool ofentrepreneurs, the means by which they exploit change as anopportunity for different business of service.
Six Ways Financial Management Helps Your enterprise Succeed 2. Manage Customers and Sales. Know and understand your customers 3. Production. through consolidated records.1. Cash Flow. Obtain goods andTrack the money services. Apply for andgoing in and out of establish credit withyour enterprise. your vendors. YOUR enterprise 4. Compliance. Report your6. Funding. company’s incomes,To be considered for expenses, and payrolla loan or investment, accurately to the IRS.you’ll need completefinancial statements. 5. Insight and Decision Making. Make informed decisions – and price your product or service for profitability – with financial reports
Kinds of Ethical Issues• Ethical Issues in entrepreneurial Operations – Income and expense reporting (income tax fraud) – “Truth in advertising”—persuasion and deception – Bribing customers and rigging bids – Direct selling—pyramid schemes, bait-and- switch selling – Effect of owners’ ethics on their employees – Accurately reporting financial information
Kinds of Ethical Issues (cont’d)• Ethical Issues and Employees – “To do an honest day’s work” – Fraudulent workers’ compensation claims – Theft of company property and embezzlement of funds – Violation of personal ethics to make a sale