Financial resources are usually limited in small business so planning is critical to determine how resources will be implemented into every phase of business activity. You should have relevant strategies based on profitable financial statements. They must demonstrate the possible future financial impact of the various courses of action directly related to the strategy. Some examples of financial statements are: budgets, income statements, balance sheets, and cash flow statements.
Business owners should also undertake a complete review and evaluation of the proposed strategies to determine their feasibility. Some strategies require the use of common sense. Others use sophisticated and complex models designed from high level market intelligence. In either scenario, every dollar spent should be for a good reason. Always ask yourself and somebody else before you pull the trigger on large financial expenditures; it never hurts to get a second opinion even if you do not agree with the response. Adding additional perspective to your decision making process is a good thing, in many cases it’s the best of things.
- The metaphor of the tub (Part 2): Cash is king (passionforstartups.com)