{"id":4700,"date":"2021-01-25T12:02:42","date_gmt":"2021-01-25T01:32:42","guid":{"rendered":"https:\/\/adelaideprivatewealth.com.au\/financial-literacy-why-its-important-and-how-we-can-all-improve\/"},"modified":"2021-01-25T12:02:42","modified_gmt":"2021-01-25T01:32:42","slug":"financial-literacy-why-its-important-and-how-we-can-all-improve","status":"publish","type":"post","link":"https:\/\/adelaideprivatewealth.com.au\/financial-literacy-why-its-important-and-how-we-can-all-improve\/","title":{"rendered":"Financial literacy: Why it\u2019s important and how we can all improve"},"content":{"rendered":"
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More than most, small business owners are responsible for \u2018knowing their numbers\u2019. But what happens when financial literacy is variable across the board?<\/p>\n

For many small business owners their day can be as colourful as a rainbow, juggling anything from products, to suppliers, marketing, and customer service.<\/p>\n

They\u2019re expected to be the jack of all trades, learning and adapting as they grow \u2014 the success of the business reliant on the knowledge of the owner; even more so if you\u2019re a sole trader.<\/p>\n

It follows then that small business owners are also expected to know finance and have a knack for numbers.<\/p>\n

While some owners will be talented wordsmiths, able to spin a yarn for a Facebook advert, others will shy away from putting their services out there. The same can be said for owners with no financial background expected to do taxes, accounting, forecasts and revenue projections.<\/p>\n

The difference being that you don\u2019t get to choose the latter, and finance is key to your continued success as a business owner.<\/p>\n

Financial literacy is a crucial part of your learning as an owner and a vital ingredient in your recipe for growth \u2014 healthy numbers reduce overheads, provide security, reduce stress, and is one less thing to worry about when you\u2019re already beginning to feel like an octopus.<\/p>\n

Let\u2019s explore ways to make the numbers add up.<\/p>\n

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1. Join the dots<\/h3>\n
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Budgeting is simple and you can start with something as simple as detailing your projected spending with your actual spending.<\/p>\n

Approach this process with positivity and consider it a regular health check to adjust your projections as you progress.<\/p>\n

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2. Back to skool<\/h3>\n
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Your homework this week is finding an hour to learn and absorb any resources you can on business and finance \u2013 you may even begin to enjoy it.<\/p>\n

Listen to relevant podcasts, (I\u2019m a big fan of\u00a0Daily Mind Medicine<\/em>, by Taylor Welch) and highly recommend\u00a0Forbes<\/em>\u00a0and\u00a0Business Insider<\/em>\u00a0to get you started.<\/p>\n

Read the finance and business sections in media outlets \u2014 digest a little everyday and it\u2019ll soon begin to make sense. Your regional news outlet will also cover business and give you a great sense of the local market.<\/p>\n

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3. Now for the\u00a0real<\/em>\u00a0homework<\/h3>\n
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Due diligence is something you\u2019ll hear a lot when you start your business, and it\u2019s important homework to hand in.<\/p>\n

Research is your friend when it comes down to choosing your bank, loans, credit cards, suppliers, and even software.<\/p>\n

Look at the reviews, further your understanding of interest rates and lending criteria. Your systems and software need to be in good shape \u2014 your tech stack is vital to the smooth running of the day to day, choose wisely and consider your options.<\/p>\n

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4. Keep it real<\/h3>\n
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Late invoices are the thorn in the side of almost every small business, and it pays to be upfront about payment terms. You\u2019re providing a valuable service and you should command the price you deserve \u2014 ensure you\u2019re exploring every payment option to meet the demands of your business and provide a contingency.<\/p>\n

Understanding your cash flow\u00a0goes a long way towards achieving basic financial literacy for a small business operator, giving you a snapshot of what\u2019s coming in and out, and what an average week or month might look like.<\/p>\n

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5. Tidy business<\/h3>\n
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Remember, the healthier your business, the happier you\u2019ll be. Invest time in yourself and your business will reap the benefits; it will also help you sleep better at night knowing you\u2019re completely across everything and prepare for the unexpected.<\/p>\n

During these uncertain times, the phrase \u2018not all superheros wear capes\u2019 has been frequently used, and I say this to the small business owners I meet. They\u2019re providing food for the table, have the courage to march confidently in the direction of the dreams, have learnt to adapt and survive during a pandemic, and truly are the backbone of our economy.<\/p>\n

I am in awe of the many owners I meet and am always left humbled by their vision, their motivation and desire to make their way in the world.<\/p>\n

Source : MYOB November 2020\u00a0<\/a><\/span><\/p>\n

Reproduced with the permission of MYOB. This article by Mel Power<\/a>\u00a0was originally published at https:\/\/www.myob.com\/au\/blog\/improving-financial-literacy-for-business-owners\/
<\/span><\/p>\n

Important: This provides general information and hasn\u2019t taken your circumstances into account. It\u2019s important to consider your particular circumstances before deciding what\u2019s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.<\/span><\/p>\n

Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents\/information contained within the linked site(s) accessible from this page.<\/span><\/p>\n

The post Financial literacy: Why it\u2019s important and how we can all improve<\/a> appeared first on MLC Contemporary<\/a>.<\/p>\n<\/div>\n

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