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Expert Answers - Small Business Financial Management Basics

How important is financial management?

finance-balance-sheet

All small businesses have something in common: a need to fully understand financial aspects such as budgets, cash flow, pricing and balance sheets. Otherwise, entrepreneurs may not fully understand what's happening with their business until it's too late.

 

Lou Davenport, a SCORE mentor for over 14 years, has helped hundreds of small business owners develop basic financial management skills that lead to success. Read his advice on how you can master your numbers.

 

QWhat are the keys to effective short-and long-term financial planning?

A: Typically, small business budgets are planned for one year, while long-term financial planning should be done for up to three years. SCORE offers some great Excel spreadsheet templates with built-in formulas that can help you prepare pro forma forecasts for up to three years. 
 
Once you learn how to use what-if scenarios, you can better analyze, track and compare business results. You can then use first-year projections as your budget, tracking things as you go along. 
There's More!
Click now to read the full interview, and visit score.org to get free advice from a SCORE mentor near you.


Next month, we'll discuss Human Resources strategies for small business.

 
Do you have a question about this topic? Send it to [email protected], and it could be included in the next ExpertAnswers interview and newsletter.
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