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Entrepreneurship can be a rewarding yet difficult undertaking. Most would-be entrepreneurs never take the plunge because of fear and perceptions. Even if a person has no fear of going into it, they will often encounter obstacles or others who will try to talk them out of it. There are more reasons given not to become an entrepreneur than there are encouragements.

 

We would like to show the reality versus the perceptions when it comes to entrepreneurship.

 

“Entrepreneurs are born, they are not made” Check out America's Best Bookkeepers

Reality

An Entrepreneur may have some innate intelligence, but becoming such happens by accumulating skills, know-how, experience, and contacts for a period of more than ten years. At present, business schools are scattered around the world, and self-learning books to achieve success abound in bookstores.

 

“Anyone can start a business “

Reality

In reality, it is not like that, and the majority of people who start the process of starting a new company, fail. The easy part is starting a business, starting it; The challenge is to survive, sustain, and build a company so that afterward, they can reap the rewards.

 

“Entrepreneurs are gamblers”

Reality

Successful entrepreneurs take careful and calculated risks.

 

“Entrepreneurs want everything for them”

Reality

The great and potential Entrepreneurs build a team, an organization, a company, and also 100% of nothing is nothing.

 

“Entrepreneurs are their own bosses and completely independent”

Reality

They must respond to investors, partners, employees, family, etc. although they can freely choose when, to whom, and what to answer.

 

“Entrepreneurs work longer and harder than managers of large companies”

Reality

There is no specific evidence about this, some work more than others, but current reports indicate that they work less.

 

“Entrepreneurs pay dearly with stress and health”

Check out America's Best Bookkeepers Reality

Being an entrepreneur is demanding and stressful, but there is no evidence to indicate that more than what other professional roles demand. In favor, they are fully satisfied with their work.

 

“Entrepreneurs must be young and energetic”

Reality

It is not a barrier, while some begin in their 30s, others do in their 60s, relevant is the know-how, experience, and contacts that facilitate the recognition and pursuit of an opportunity.

 

“Entrepreneurs seek control and power over others”

Reality

Successful entrepreneurs are driven by the pursuit of achievements, responsibility, and results rather than power.

 

“Talented entrepreneurs achieve success in one or two years”

Reality

Rarely a stable business is established in less than 3 or 4 years.

 

“Entrepreneurs with good ideas can summon a venture capital”

Reality

Entrepreneurs with good ideas that sought a capital Venture only 1 to 3 out of 100 managed to create a company.

 

“Entrepreneurs are lone wolves, they cannot work as a team”

Reality

The most successful, build great teams, and effective relationships to work with their peers, directors, investors, customers, and suppliers.

 

“Money is the most important thing for them”

Reality

A feeling of personal fulfillment, achievement, control of their own destiny, realize their visions and dreams are their most powerful motivators. Entrepreneurship creates a lot of wealth, but it is distributed unevenly.

 

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“With enough money for the start-up, you cannot fail”

Reality

The opposite is always true; with too much money at the beginning and lack of discipline and impulsive spending, usually leads to severe problems and failure. The typical start-up only requires around 25 thousand dollars.

 

“Entrepreneurship is expensive and usually ends in failures”

Reality

Businesses fail, but not the Entrepreneur. Failures temper it with the learning experience.

 

“Unless you have a high SAT or GMAT, you will never be a successful Entrepreneur”

Reality

An Entrepreneur’s IQ is a unique combination of creativity, motivation, integrity, leadership, team builder, analytical ability, and the ability to deal with adversity and ambiguity.

 

“Luck is everything for an entrepreneur.”

Reality

Although luck can help, it is not determinative. In reality, more than luck, a good entrepreneur needs the right attitude to capitalize on opportunities.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

Business team discussing interface of new mobile application
A fine financial management structure depicts how an entrepreneurship business is doing and why. A well-organized system for bookkeeping is critical to establish procedures to manage and control finances. Financial management is the system to place digits to work for a successful business. Financial management is used to formulate the decision that improves business operations and make it more successful.

Advantages of Financial Management

Financial management makes you a better macro manager. These are the advantages gained if you ace financial management:

  1. Turning your business with proactive management.
  2. Debts for business are easily approved.
  3. Quick formulation of an efficient financial plan for sharing with investors.
  4. Accessibility to good tools for making critical financial decisions.
  5. Investing money on fixed assets wisely.
  6. Efficiently maintain inventory and accounts receivable, develop working capital for short-terms.
  7. Clear knowledge of growth orientation and setting goals for sales.
  8. Improvement in margin of gross profit by effective pricing of your services and cutting the effective costs of direct labor, supplier prices. All of these measures affect costs of products.
  9. Cutting down of administrative expenses and general costs plus a more efficient business management.
  10. Planning for taxes.
  11. Planning in advance for worker settlement.
  12. Executing sensitivity analysis with the diverse fiscal variables involved.

Developing a System for Financial Management

The first step is to create the financial statements. For proactive management, you need a plan in which a monthly generation of financial statements is done. This statement needs to include:

  • Income statement
  • Balance sheet
  • Cash flow statement

All of this information can be extracted from bookkeeping, invoices, bank statements, and invoice receipts.

Master Financial Business Management with these 6 Tips from the Best Entrepreneurs

1. Profit Doesn’t Characterize Success

In financial management for entrepreneurs, profitability doesn’t indicate success. Rather, growth indicates that a business is excelling and on the right path. Profit is the ultimate goal for sound entrepreneurs but growth of the business is critical to determine how the business is doing.

2. Identify what Metrics Affect the Business

Identify the financial metrics which are universal and applicable to every business. Closely look into your specific business and identify specific metrics that affect your particular company. The universal metrics are revenue, operating expense, money on hand, gross margins, etc.

3. Don’t Drop Capital on Dumb Mistake

Efficient bookkeeping will help you in assessing your mistakes and where you are losing money. Identify all of the areas where money wastage is avoidable because early profits are more worthy in entrepreneurship.

4. Carry Out a Cost Review

An audit of the business should be done because you cannot monitor all of your employees all of the time. This should be done at least quarterly to have a close look on your expenses and how to justify them.  Audits also reduce the risk of fraud.

5. Make your Time Count

Entrepreneurs have to do many tasks themselves due to small budgets. They have to maintain bookkeeping, run payrolls, etc. Entrepreneurs do things themselves to save money but, in reality, this time should be spent in growth of their business. Use technology to save your time.

The monthly financial statement can be generated through the latest automated software package especially designed for accounting. These are to be used with your manual bookkeeping system. To save your time, you can also employ internal or external bookkeepers to provide you with monthly financial statements.

6. Build a Method to Track Success with Time

Every entrepreneur must have a system to assess success over time. This system is used to validate the financial management system and to reset goals, if needed.

Conclusion

To grow a successful business as a sound entrepreneur, you must have a deeper understanding of your financial management system. Sabrina Parsons, CEO of Live Plan, believes “budgeting, forecasting, and planning are not just for start-ups. If you do this for an ongoing business, you’re going to grow 30 percent faster, you’re going to be more successful and your numbers are going to mean more.”

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

Accounting Statements - Complete Controller

Understanding accounting, the language of finance and business, is crucial for all business owners and entrepreneurs. When starting a business, learning how to read financial statements is as important as managing any other task. It is of utmost importance to understand the statements, rather than continuing to invest money blindly.

With time, the business will hopefully expand, and bookkeeping with other companies, tax authorities, and customers will have to be made. The business bookkeeping must always be counted and rechecked. These transactions of business and records are maintained using various financial statements and accounting terms.

A successful entrepreneur has a strong understanding of the tools of accounting and finance. Grasping the knowledge of interpreting account statements allows an entrepreneur to be able to accomplish principal tasks. Check out America's Best Bookkeepers

  1. Entrepreneurs can evaluate and predict the future of business. They can work with other like-minded entrepreneurs to make business plans accordingly and work to achieve their goals.
  2. They can use their time, energy, and money more effectively by making important decisions to help the business grow.
  3. They can review business plans and respond tactically after interpreting accounting statements to prevent loss to the company.

The following are the three most important financial statements in business bookkeeping.

Income Statement

An income statement is divided into sales and expenses.

Sales include the selling of goods and services to customers and receiving monetary payments in return.

Expenses include:

  1. The purchases made on behalf of the company
  2. The employees that were hired for running the business and their salaries
  3. Bank loans that were received on behalf of business for investment or other purposes in the company
  4. Tax expenses that were paid as income taxes Check out America's Best Bookkeepers

Balance Sheet

A balance sheet is a collective form of statements that are made based on all transactions made in the past. It categorizes assets and liabilities.

Assets can be fixed assets as well as cash in the bank. It includes the raw materials, work in progress that will yield profit, finished goods, and the value-added tax. Value-added tax is a tax on the amount by which the value of an article has been increased at each stage of its production or distribution.

Liabilities comprise the payments that have to be paid by the company. It includes the gross amount of money that has to be paid to suppliers. Value-added tax liability is money paid to tax authorities for the sales that were done, and debt is the amount of money that has to be paid by the company to the lenders.

A balance sheet needs an end balance.

Cash Flow Statement

Cash flow statements show the money that flows in and the money that flows out.

A cash flow sheet includes the investing and financing cash flow. Investing cash flow is the invested cash in the fixed assets of the business. The financing cash flow describes the money in capital from what was either received from the investors or paid to the investors.

A third but essential form of cash flow is “operating cash flow.” It explains the money flowed-in and flowed-out to the running business.

These three cash flows are added and show the change in the overall amount of cash. Check out America's Best Bookkeepers

Conclusion

The above three financial statements are interrelated. As the income and expense statements increase, the assets and liabilities in the balance sheet will increase. The assets and liabilities will decrease per the cash flows from the cash flow statement.

Entrepreneurs need to know important information in credit analysis of their business. Understanding and correctly interpreting financial and accounting statements can work as a litmus test for entrepreneurs.

Accounting is the language of business. Interpreting this language will help entrepreneurs determine their value of assets. They will be able to calculate profitability and also estimate the risks in the assets of the company. They can understand the company’s financing sources. Entrepreneurs must realize investment, credit analysis, and profitability. The entrepreneur’s ability to identify debt and equity shows insight into the value of a company.

 

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
financial mistakes - Complete Controller

There is no specific age to fall into financial folly. With every new monetary milestone, business goal, and responsibility comes a whole new perspective of how you manage your finances or mess it all up. If you find yourself guilty of a spoiled personal financial viewpoint, you are not alone. Every generation reveals many significant mishaps, poor choices, and financial mistakes that its members often make. The smartest way to avoid creating or repeating such blunders is to recognize and understand such issues before it’s too late. Keeping that in mind, here are five of the most common money mistakes that each generation seems to make. Check out America's Best Bookkeepers

  1. Individuals in Their 20’s – Must Overcome the Fear of Investment

Young individuals need to invest significantly in growth stocks. Though they accompany some risk, they offer the immense potential for higher returns over time. Sadly, too many people in their 20’s are too afraid to take risks or are extreme risk-haters that avoid investing. Instead, their portfolios are inclining on their assets and little on stocks.

According to experts, one of the financial mistakes of risk aversion stems from financial illiteracy and a terrible generational fear of failure. Also, they believe today’s young generation is more skittish due to unpredictable events they have witnessed in their lifetimes, such as the financial meltdown and the 9-11 attack. To date, mutual funds are one of the most practical ways to ease the angst about investments. They begin with riskier growth assets and, over time, slowly transition to more conservative holdings.

  1. Individuals in Their 30’s – Too Much Expectation and Information Check out America's Best Bookkeepers

Today, more and more Americans are waiting until their 30’s to begin a family or purchase a house, marking this age as a turbulent time. Although these young adults often think they must live the way their elders did, it takes considerable time to build that level of financial status and comfort. Attempting to live that ideal lifestyle by shrinking credit card debt and purchasing a big house will eventually make it more challenging to fulfill their long-term financial goals.

Poor investments are among the most common financial mistakes that today’s 30’s generation makes due to the lack of financial knowledge of the several potential opportunities and available options. Young investors lacking the willingness or time to educate themselves might consider approaching financial professionals and bookkeeping experts for smart decision making.

  1. Individuals in Their 40’s – Baring Family Expenses All Alone

The ’40s is the period with the toughest expenses of all – raising kids, buying homes, maintaining a family, baring their children’s education expenses, and possibly even caring for an aging parent. Such burdens have to be managed proactively to prevent both short and long-term difficulties. Baring all of the financial burden alone is one of the biggest financial mistakes that the 40’s generation makes today. Instead, they must encourage sharing the financial burden among other family members and encourage their children to be financially independent by working a part-time job or applying for scholarships. Also, they should start living within their means and build an emergency fund as soon as possible. Check out America's Best Bookkeepers

  1. Individuals in Their 50’s – Trying to Catch Up

Too many people reach their fifties and realize that they have nothing saved for their retirement. Such financial mistakes can be avoided if individuals start saving for their retirement far earlier in life. With the hope of building a business to support their retirement years, an increasing number of Baby Boomers in their 50’s are turning towards entrepreneurship. However, it can render a risky proposition with both immensely significant upsides and downsides.

Although retirement feels uncomfortable when one has to prioritize saving, work a side job for necessary income, and downsize a home and lifestyle, it defeats the fear of an under-funded retirement.

  1. Individuals in Their 60’s and Beyond – Fail to Ask for Help

According to financial experts, today’s older Americans are comparatively less mature than elderly citizens of earlier generations. However, age inescapably lowers the brain’s analytic abilities, making it hard to avoid financial mistakes. Hence, every person must have people they can rely on for financial assistance and decision making matters in their late years. These people could be your family members, friends, financial advisers, or a mix of them.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Frugal Entrepreneurs - Complete Controller

Over the years, companies have saved millions of dollars through professional advice and counseling. With success comes the added responsibility of managing your resources well. Small business owners, on their ladder to success, might fall into spending more and not practice being frugal entrepreneurs. The important lesson to learn here is that you must squeeze the last drop out of your every dollar if you want to continue climbing the ladder. Check out America's Best Bookkeepers

It’s a Mindset

Being a frugal entrepreneur doesn’t necessarily mean that you have to save money at any cost. Making good, budgeting decisions will differentiate your business from others. Most people start their business with a bare minimum, but their focus is to improve the operations of the business and not to impress people. Even when your business grows, it’s this same mindset that will keep you going and will keep you out of trouble as well. The point is to offer all your employees a comfortable working space, not something luxurious. Everyone needs to be on the same page and must understand the value of every single dollar that is used.

Frugal Entrepreneurs save themselves from resentment

If the boss sits in a lavish office and enjoys all of the perks while others are sitting at their old desks and putting their blood and sweat in for the cause, it certainly doesn’t equate to a cohesive working environment.  A simple office can do the job as well as any other. If you are worried about impressing others with your “stuff,” you will not be able to sway your clients with your results. Check out America's Best Bookkeepers

 

Wage gaps and other terms like these make employees quite aware and, by leading a luxurious lifestyle, you not only attract unwanted attention but can also cause resentment from your employees. However, this is not to undermine the importance of all of the basics. You must have the basics and deserve to have them because you have put in a significant effort in the overall scheme of things.

A Frugal Entrepreneur is Sharper

With success, comes the added responsibility of micromanaging your finances as you tend to overspend more often. What you would not have bought otherwise, you will be inclined to buy because you will convince yourself that you deserve some credit for your efforts, and it boosts your ego. There is nothing wrong with treating yourself occasionally, but if you start doing it more often, it can affect the other walks of your life, including the business.

 

Experts call it an opportunity cost, which is something that could have been done with the same amount invested elsewhere. There will always be an opportunity cost for your decisions, no matter how much success you achieve. Being frugal means that you can make smart decisions as you have the capital to finance your desires for the business and yourself. A frugal entrepreneur is always sharp in choosing the most cost-effective ways. Check out America's Best Bookkeepers

Being a Frugal Entrepreneur trains you for Bad Times

Spending your money sparingly will ensure that you have enough kept aside for bad times. Always remember that you will not stay at the top, and success is always followed by hard times. A business always ebbs and flows. When times are hard for your business, you must be ready to face it. When you are accustomed to leading a simple life, you will not be so shockingly affected by a recession or increase of competition in the market. You will survive and bear the burden with an open heart and enough courage to keep on going and make it to the top again.

Some Misconception

Being a frugal entrepreneur does not mean that you are not ready to spend big when the opportunity comes. In your business, you will have to make decisions about spending on a new asset or investing in a lucrative project. Go ahead and take the risk if you have done your research about the results going in your favor. The mindset matters, which should be firm and frugal, even when you are at the height of your success.

 

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Entrepreneurial Advice - Complete Controller

If you are aiming to begin or have started a business, then be aware of these four cheap pieces of entrepreneurial advice.

  1. Quit your job and commit to your new business full-time

Remember, having more time to put your efforts and energies into your project is not going to enable you to become more successful. You value your time more when restricted. You are typically focused as the time constraints force you to be more productive and efficient. Instead of quitting your job, losing your primary source of earning, and increasing financial stress in your life, learn to get more accomplished in less time. Reinforce your productivity with task-automation that requires repetitive efforts. It would help if you also outsourced the activities that you cannot automate with the help of a virtual assistant and make the most of your extra time in networking and building a customer base for your new venture. Check out America's Best Bookkeepers

Stop thinking that it’s all or nothing. Remember that the most successful businesses in their start were a part-time gig long before the owners made it their full-time attention.

  1. As Entrepreneurship is all about risks

Although starting your venture or side business is never without risk, every entrepreneur is not a bold risk-taker. Most successful corporate owners do everything to minimize their risks. The founders of Warby Parker continued working their old jobs for a long time, even when their company was already a huge success. They waited until they were confident with the net functional safety and effectiveness of the business in generating revenue before taking major risks. Consequently, as a start-up enthusiast, you must weigh the benefits and advantages of growth against the time, efforts, and costs needed. As bookkeeping is essential for preparing financial statements, idea evaluation is necessary for entrepreneurship.  

  1. Never share your business idea, or someone will steal it

You may have heard stories of people who had their unique business idea stolen from them. However, I have never known an entrepreneur who has experienced this. Is it possible? Certainly! However, the tough reality is that most of the business ideas we think are brilliant are terrible in one or more ways. Check out America's Best Bookkeepers

 

Although you may not prefer telling everyone you meet your business idea, you must obtain genuine feedback and business advice from experts. Your friends will hesitate to give negative comments about your ideas, as they think you might feel disappointed and see them as your enemies.

If you are deeply concerned about your idea being stolen, there are many NDA agreements available online you can benefit from. However, you will hardly find ten other people who may have pitched an investor willing to sign it as the same idea. Thus they cannot afford to lock themselves into an NDA. Also, your idea implementation is more necessary to them than the idea itself. Following this entrepreneurial advice could lead you to spend years pursuing an insane idea.

 

  1. You get only one chance at making an impression 

When you share your idea with someone renowned in the industry, they will probably not remember you. They meet so many individuals daily that each face becomes part of another crowd. Although it is certainly a big deal for you, it may be one of the hundreds of interactions they have every day, not to burst your bubble. Check out America's Best Bookkeepers

Consequently, avoid worrying so much about whether you did or said the right thing. Instead, visit different organizations, make new professional friends, and show courage.

Conclusion

While there’s nothing wrong with accepting guidance and help from professionals that have been in the industry longer than you, proceed with caution when someone suggests the four pieces of entrepreneurial advice discussed above. Listening and following them could significantly harm your career as well as your start-up business success.  As with any big life decision, it’s most important to listen to your intuition and allow that to guide your way.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers