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Small Business Startup School – Learn The Psychology Of Retail And Financial Awareness - For The Reasonable Optimist
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EP.32 – How to Read and Interpret a Balance Sheet - Part 7
Manage episode 398499073 series 3470762
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Welcome to another exciting episode of Startup Your Small Business and Learn. Hosted by Ola Williams, this podcast aims to enable budding entrepreneurs with the psychology of retail and enhance financial awareness, all while staying positively optimistic.
In this episode, we continue to delve into the world of balance sheets, explaining how you can negotiate your payables to effectively improve your financial standing. Entrepreneurial success comes down to strategic management of liabilities—something that has been discussed extensively in previous episodes. It's all about your business's ability to not feel pressured and to have the freedom to operate smoothly.
But what about the warning signs on your balance sheets? Are there obvious signs of danger? And are there practical steps you can take to maintain balance? Drawing from years of experience as an accountant, Ola Williams advises that assets must be capable of generating cash to ensure your business's survival. The secret lies in turning these assets into liquid cash, often referred to as 'working capital'.
Further, your current assets could be cash in the bank or items that can easily be converted to cash. But if you're finding that your current liabilities exceed these, then you may be in financial distress, and it might be time to reassess your small business's financial standing.
By the end of this episode, you should understand balance sheets better - from a non-finance background lens and you should be equipped to spot trouble in your finances and, with the strategies shared, be able to navigate through them.
Remember to apply these lessons according to your personal circumstances and seek professional advice when necessary. Please do share the show to foster a community of startup solopreneurs learning together.
Stay tuned for the concluding episode of the series.
This episode is part of an ‘8-series’ show on how to read and interpret a balance sheet. This is part 7.
Do you have questions or comments? Your feedback ensures that we continue to give you content that adds value to you, fuelling our commitment to providing high-quality content and fostering a community of informed and successful entrepreneurs. Leave your voice note here
We are arranging to bring a guest who recently won a pitch competition to share ideas on effective ways to pitch ideas as entrepreneurs. Ahead of the show, let’s know if there are questions you would want answered during the show. Take a listen here and reply, if you’d like your input featured
Connect with the host, Ola Williams:
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