Demystifying The Financial Statement Relationship

This is the final post in the financial statement series, where I will explain how all of the various financial statements link together, to help you to use them to analyse companies/investments and their real worth. Before reading this you may want to check out the other posts in this series to help your understanding of the financial statements relationship.

Continue Reading>

Should You Put Up Your Business For Sale?

The idea of diligently working hard and then putting up your business for sale is what it’s all about. If you’ve done your job well, you’ve increased the value of your company and you can sell it. 

That is exactly what my plan was for my business [check business section for diary entries] if I was lucky enough to build it to that stage. When I spoke to my friend about my grandiose plans for the future he suggested that I would have to think about it very carefully though. Here’s why:

Continue Reading>

Breaking Down The Retained Earnings Statement

This is part 4 of the financial statement series. The full series is Part 1, Part 2, Part 3, Part 4, Part 5

Now we’ve reached the Retained Earnings Statement. In Part 3 of this series, I spoke about the balance sheet and the formula which was ‘assets = liabilities + shareholders equity’. Let’s take a look at how the retained earnings statement works and break it down in greater detail.

The statement of retained earnings can also be referred to as ‘statement of shareholders equity’ or ‘equity statement’. It records the amount of money [equity] that the owners have in the business at the beginning and end of the period being looked at. It also includes the earning or losses during that period.

A very simple example would look this way:-

Continue Reading>

Balance Sheets Made Simple

This is part 3 of the financial statement series. The individual parts are:
 

Basics Of The Financial Statement

Reading The Cashflow Statement 

Understanding The Balance Sheet

Knowing How The Statement Of Retained Earings Works

How do you make reading a balance sheet nice and simple to understand? That is what I’ll be doing here. The balance sheet is another part of the financial statement which is wonderful for a business owner or investor because it allows them to very quickly assess the financial health of the company, which helps them to make their buying or investment decision. It can be very confusing but it’s really quite simple once you understand it. Let’s get stuck in!

Continue Reading>

Business Cashflow: Read Between The Lines!

This is part 2 of the financial statement series. You can read part 1 HERE

In this post, I will be discussing how to read a cashflow statement in conjunction with the other financial statements in order to get a clear picture of how well a company is performing.

The cashflow statement is an interesting document to keep an eye on, as it tracks cash flowing in and out of the business at a specific point in time. Because the availability and flow of cash is the most important thing to a business or investment,

Continue Reading>

Finding A Business Accountant

So guys, I finally managed to get over to a business accountant to discuss my ideas and how I plan to execute them. The accountant I saw was very good and came recommended from a work colleague whose husband has a small business of his own. Initially when we go down to talking I gave him a brief overview my business was about and what I was trying to accomplish.

The conversation that followed was very informative, and most of it focused on determining the best structure for my business. He taught me about the pros and cons of each business structure, and helped me to become better informed as to which one would probably best suit my own business needs. He also explained in greater detail the services that an accountant could offer if you were willing to pay for them! 

They can help you with things such as the following:- registering your business

Continue Reading>

The Financial Statement - A Primer

After talking a business friend of mine, he hammered home the importance of learning how to read a financial statement. After I told him “I’m not really interested in all that stuff, I’ll just get someone else to look at it for me” he said “Alex, it’s mandatory! Without knowing how to read them, you’re a sitting duck!”

With that in mind, and eager to make sure that I start off on the right footing, I decided to explore this in great detail and acquire the skills necessary to be able to read financial statements well. It took a while for me to knuckle down and learn what I needed to, seeing as I always had a fear of ‘numbers’ and that the idea of a financial statement seemed extremely complex and confusing. In this post, I intend to share the knowledge I acquired in this area as best I can, without putting you to sleep! This is the first of a 5 part series. [Part1, Part 2, Part 3, Part 4, Part 5]

Continue Reading>

Creating A Business Logo

So the next thing to think about in greater detail was my creating a business logo and what I wanted it to represent, making sure that it was something powerful that would be recognized in the industry. It’s strange, but right from the original inception I had a glowing image in my head of what I wanted; something very simple, but something I could make my own with the design and the name of the business attached to it. In a financial statement, the details of which I will be explaining in greater detail in a later post, things such as logos show up on your sheet as goodwill; not necessarily

Continue Reading>

Writing A Strong Business Plan

Ok guys so I have muscled up the courage to start looking deeper into how I can start to write a plan that will help my ideas come together for my business. I heard somewhere that learning how to raise capital is a very important part in becoming successful. Basically that means learning how to present your request for money in a way that will get you the amount you need from a bank/lender in order to further your dreams. Now I still haven't raised any capital yet and I'm sure I will be making mistakes aplenty lol, but for now I just wanted to let you know that I am well and truly on the path to writing it down on paper and making it more of a reality, rather than being an idea within my mind.

So how did I find out how to start? Well, as I

Continue Reading>

A Business Idea

So...I'm 26 and STILL broke trying to navigate my way to yell0brickrd: 400k each year. I aspire to exit the workforce and get to the position where my assets pay for all my living expenses and then some!

At the moment I have a sales job in the pharma industry which provides an average income. I spotted a gap in the market in the industry where a simple service idea could make life a lot easier for the clients I talk to on the phone on a daily basis. I took the chance to briefly talk about the ideas in a vague manner and the initial response seemed very positive. Spurred on by what I feel is the strong validity of the idea, I have decided to explore this as my first real business.

My very first challenge

Continue Reading>