Unless you are buying an existing business, chances are you are one of the many Australians who, every year, decide to start up a new business from scratch. Often in these situations, the dream has been bubbling along in someone’s mind while they are engaged in paid work for someone else. They may have seen an opportunity in the market to try something new or believe they can provide a better service to the marketplace than their existing employer.
Whatever the reason, they are usually long on knowledge and skills in their subject area, but short on financial knowledge. In the early stages their accountant, if they have one, may set up a simple system for them to do basic bookkeeping transactions themselves, and review the results monthly or quarterly. If they feel the cost of an accountant is too expensive at this stage, they may try raising invoices and paying bills themselves or use an online bookkeeping service to handle day-to-day transactions.
The danger with this approach is that they are spending their days servicing their clients and their nights wading through paperwork that they may not fully understand. Eventually, savvy business owners realise they need to improve their financial knowledge, so that when they have meetings with their bookkeeper or accountant, they get the best value out of the experience. With deeper understanding, they ask pertinent questions and feel confident in expressing opinions.
So how can an extremely busy business owner find the time to acquire some basic financial knowledge while keeping the business afloat? The traditional approach would be to enrol in an appropriate course, but the internet now provides a myriad of ways to acquire knowledge. The trick is to be sure that the information provided is up-to-date and factual, something for which the internet is not noted.
However, there is another way. Many accounting and financial services companies now use the internet to keep their clients informed of movements in the financial markets, changes to tax laws and other developments. A company like Charter Partners for example, uses their website to publish newsletters, blog posts and internet links to reliable sources of financial information that can be accessed by anyone.
Reputable accountants also make themselves accessible to their clients, building client knowledge through engagement. Some companies also offer specific business mentoring programs where clients meet regularly with qualified people who coach and guide them towards making better decisions. This process enables them to acquire practical financial skills without the commitment of undertaking formal study.