How financially literate are you? Small businesses without a strong base for financial planning are in danger of becoming nothing more than a statistic within five years of starting out. We can help you get schooled this Financial Literacy Month! Check out all the resources and events we have this month to help you get started.
Now that Small Business Month has come to a close, Financial Literacy Month (#FLM2017) is following hot on its heels. This November, it’s time to get hyper-focused on your financial plan.
Every business owner should have an understanding of the basics of finance. Time and experience will help you learn and grow, but even if you’ve been in business for years, there are probably several aspects of financial management you aren’t familiar with.
Your finances are tied to the specifics of your business. Your financial professionals – accountants, investment advisors, and other specialists – can help guide you through making decisions, but you should, at the very least, be able to see the big picture of your finances and how it all ties together with your day-to-day operations. So, get out there this November, and get schooled!
This year’s theme is “taking charge of your finances”, which means reducing debt, implementing budgets, and creating a long-term financial savings and investment plan. Instead of simply making financial decisions as they come, you should be able to refer to your financial plan and data for guidance when making decisions. For example, if you’re deciding whether to make a monthly investment in a digital marketing strategy, you should be able to refer to your budget to see where it can fit in, and whether you need to readjust the rest of your marketing costs to stay on budget.
Take this three-question financial literacy self-assessment test to see how savvy you are. If you’re among the 58% of Canadians who can’t answer all three correctly, it’s time to get learning!
If so, ask yourself these questions:
What will you do when you retire?
What will you do if the economy crashes?
What will you do if you become ill or disabled, and can’t work?
What will you do if your business doesn’t survive?
We all want to be optimistic when planning for the future, but the truth is, over 50% of startup businesses fail within 5 years. While you don’t want to plan for the end, it’s better to be prepared for disaster than caught off guard by it.
Of course, money is tight in those first years; Intuit Canada research shows that “58% of Canadian small-business owners started their businesses with $5,000 or less.” Combine that with debt and loans, and the statistics suddenly make sense.
This is where planning comes in. Even if you aren’t generating savings or investing yet, you should know where, when, and how you’ll do so in the future. Or, better yet, find out how to manage your finances so you can start saving and investing right now! Either way, it all starts with education.
With so many aspects to financial management, it’s easy to feel buried before you’ve even started.
Instead of trying to take it all in at once and feeling overloaded, focus in on three primary aspects of your finances this month, such as:
- Implementing a cash flow plan
- Making sense of financial statements, reports, and data
- Learning about different investment avenues and risk factors
- Managing debt
- Learning about borrowing, alternative lending strategies, and interest
- Implementing tax strategies and preparing for audits
There are plenty of resources to get you started with financial literacy. The Canadian Financial Literacy Database has thousands of easy-to-browse and informative links on various subjects, including banking, fraud, retirement, and pensions.
Better yet, get a coach! Many of NABI’s drop-in business coaches are financial professionals who can help you with specific questions or general knowledge in a one-to-one session. Whether you need advice on accounting, bookkeeping, funding, or investing, we have someone on our team who can provide you with solutions. Give us a call to book a session, or drop into Commons!
Best of all, you can attend NABI’s Financial Literacy Lunch & Learn on November 22. Linda Mak from Money Mentors will be on hand to help you drive your financial knowledge forward, which will ultimately help you drive your bottom line forward.
Register online or call us at 780-460-1000 to book a spot. This event will fill up fast, so register before they’re all gone!
Did you know:
Employees are more invested, productive, and understanding when they are financially literate. Instead of only seeing the distinction between employee/employer, they’ll understand the responsibilities that come with financial management, and get a sense of where they fit into the business, and how they can help drive it forward to benefit everyone.
So treat your employees to lunch at NABI’s Lunch & Learn, and help them improve their financial skills too!
Northern Alberta Business Incubator Society (NABI)
13 Mission Avenue
St. Albert, AB T8N 1H6
200 Carnegie Drive
St. Albert, AB T8N 5A7
Hours of Operation:
Monday to Friday 8:00am-4:30pm
Mountain Standard Time (MST)
Closed Saturday, Sunday and Holidays
Directions to NABI: Click Here