BAC G1-G2 2010
Managing Your Money
A good financial plan is a necessity for every enterprise. Financial analysis makes it possible to estimate how much money you need to run your business as well as to guarantee profit. Financial strategies allow you to look before you leap. Good financial planning facilitates business development and enables financial control. You need to understand the basic concepts in order to calculate the figures. To avoid the second cause of small business failure, which is finance and especially lack of capital, you should carefully consider the sources of funding your company. These funds can be divided into:
- Equity capital
- Borrowed capital
- Retained capital
Many entrepreneurs either fail to prepare an estimate at all, or they underestimate the amount of money needed to run their business. An accurate estimate should be made of how much capital will be needed to keep the business running. Do not cheat yourself or you will end up in trouble with creditors. The question to ask is: "Am I really using my capital and my profits wisely to develop my business?"
Adapted from Business Management