The study of business strategy has its roots in territorial values. That is to say, the first strategies came by way of fighting. Eventually, money sought to replace all measures of violence although it was unsuccessful in its goal of completely diversifying human intentions. Either way, money has become the most common way of measuring success in business and the modern world operates in a fairly organized way regarding business practice. So, like with the world’s first strategy, it’s important to understand the basic principles that all successful business people practice. We call this finance. Finance is simply a process of defining the amount of money a business needs to spend in order to create the ideal amount of profit. So, if you have a real goal, you can then begin bridging finance to profits. It’s important to note that finance is not paying people or buying things, it’s the process of raising, planning, and preparing the right amount of money. Therefore, bridging finance and your goals will provide your business with a comprehensive strategy.
There has been a paradigm shift towards startups in the last decade. The spread of internet as a mode of communication has enabled new entrepreneurs. Communication and disseminating information has never been easier. However the business to be successful needs to do some specific things. Major characteristics of a successful business are:
- Clear cut Objectives – A business which is successful has well-defined objectives. It leads to goals and operations being robust and well-directed. The objectives act like guiding light for the business.
- Planning – Planning is the key to meeting the objectives of business. A well-made plan is vital to success in business. It also helps in removing uncertainty to a certain degree. Cash Loans can help while planning to meet immediate expenses of business.
- Periodical Market research – In the present scenario markets and consumer tastes are changing rapidly. Therefore periodical market research has become essential for knowing the needs and modulating the product/service according to consumer preference. Small business have greater flexibility in making changes. Country of origin labeling is one such thing which helps categorize.
- Employee Involvement – Gone are the days when the employees used to toil hard without being a part of profit. The right way is to include the employees and make them shareholders. This way they will have reasons to work hard. Better talent is essential for business success and involving employees helps attract better talent.
- Presence on the Web – In this digital age traditional way of setting an office does not work. Business will need to have presence on the internet. Convenience of this medium and the power it has should be acknowledged.
It was an article that got me excited about finance, and then I started my journey to learn more about it. I spent more than 200 hours with senior chartered accountants to understand numbers, to demystify numbers for a layman. Throughout this blog I will be using my philosophy which is KISS – Keeping Information Simple and Specific. Albert Einstein very beautifully said – “If you can’t explain it simply, you don’t understand it well enough”.
There is a qualification criterion to read and understand financial statements. This is the yardstick that I use to find out if my clients qualified to read and understand financial statements. Let me use the same thing here. It is a trade secret which I do not let out but now will
If you think you can read and find meaning from the above picture and it makes sense, it simply means you are qualified to read and understand financial statements. Does that mean you should learn tennis. Well it is not that. If you can read numbers you are qualified to read Financial Statements
Business is Simple
Business is not complex but very simple. Just follow the simple rule – Earn more, spend less.
While doing business when we add the transactions that involve money coming in and Money that is supposed to come in, it is the total earnings, and when we add money going out and the money supposed to go out it is the expenses or spending.
When the income is more than spending the business will make profit. It is so simple to do business.