7 Skills Your Business Must Have

DOWNLOAD THE PDF

Good Monthly Accounting

Some form of accrual financial processes – i.e. a 3rd payroll should not define a good/bad month
Timely entry of revenues and expenses
Monthly swings in numbers are due to business events, and not bad accounting
Awareness of key reporting deadlines for banking, tax and other compliance items

Understanding of Cash Flow

Where is the cash coming from and where is it going?
Some forward-looking visibility
Managing cash swings in collections and payments due to seasonality or other factors

Understanding of Key Business Drivers

What is the true cost to deliver a product?
Are margins understood and predictable?
What drives revenue?
What are the key components in the business that could swing profitability, cash flow, etc.?

Understanding the Different Parts of the Business

Is there visibility into multiple product lines, types of operation?
Ability to prevent consolidated numbers from masking key information underneath

Ability to Manage Risk

Understanding of the company’s ability to withstand stress
Understanding the risks in long term customer and vendor contracts
Understanding competitive, operational, regulatory risks and potential impact
Understanding insurance needs and have adequate coverage in place

“Right” Amount of Capital

When and how to use Equity vs. Debt
Not over/under levered based on the nature of the company’s balance sheet
Matching capital with use – Short term vs. Long Term
Understanding the risks and rewards of current and prospective banks/lenders/investors