We all like to think that we’re financially savvy. We shop around on comparison websites for our home and car insurance. We look at which banks are offering the best interest rates on mortgage deals. And we definitely like to know about any money-saving tips.
But if you run your own business or work for a large company, are you as confident that you know what’s going on financially? Let’s do a quick test.
Would you know how to read a balance sheet if it was put before you in a meeting?
Do you understand what the term ‘cash flow’ means?
If you were running a business would you be able to decide on an appropriate price for your goods or services?
Could you prepare a budget (even if it’s only your own household budget)?
If you were starting a business, could you work out when the ‘breakeven’ point was reached and you started making a profit?
It’s absolutely essential that you understand and keep on top of your finances if you are running your own business – or you wouldn’t be running it for long, would you? But it can also be important to your career prospects if you work for someone else. If you manage a department you don’t want to seem naïve or ill-informed in meetings if you can’t understand what others are talking about. Plus, if you’re asked to prepare a budget for your department, you need to know how to go about it.
You’ve probably heard the saying: Knowledge is power. And, just to return to our short quiz, if you answered ‘no’ to any of the questions – isn’t it time you found out the answers?!
Author: Diana Nadin
