Is your business financially healthy? Financial health in a business means much more than profit, though that’s a great first step. To know if you’re financially healthy, you must look at more than just bank account balances. Instead, you must consistently analyze your financial statements.
Analyzing the three main financial statements regularly, will give many insights into how your business makes money, spends money, and retains profits. Analysis is not a long or arduous process, but to do it, your bookkeeping must be accurate and updated and, you must know what to look for in the financial statements.
This video gives a summary on how to complete this analysis and what to look for in your financial statements to determine financial health and profitability. Once you’ve determined this, you can move onto the business and life changing steps of setting goals, beginning to pay yourself first, saving for taxes, and getting ahead of the “survival trap” so many business owners fall into. This allows you to really look into the future and make decisions because they are best for you and the business, not because they have to be made to save the business.
What have you found after analyzing your business? What questions does this bring up?