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Professor Dawn Fotopulos Founder, Best Small Biz Help.com

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1 Professor Dawn Fotopulos Founder, Best Small Biz Help.com
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners Professor Dawn Fotopulos Founder, Best Small Biz Help.com

2 "numberphobe"? What's a Terrified of numbers!
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners What's a "numberphobe"? Terrified of numbers!

3 Does your mechanic drive your car?
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners You Read Numbers Every Day Weight scales Thermometer Bank account balance You know how to read numbers Small business owners never look at their numbers Accountants will do not read them for you Does your mechanic drive your car?

4 car with your eyes closed? No!
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners Do you drive your car with your eyes closed? No! Then don't run your Small Business without knowing how to read your financial dashboard.

5 ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners
What If… You could work half as hard and make twice the money? What if you could run your small business free of debt or meddling outside investors? What if you could finally get a return for all your sacrifices and sleepless nights? You can.

6 Jewelry Designer who avoided bankruptcy
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners Who Has Benefitted? Jewelry Designer who avoided bankruptcy Reduced expenses, cut products, increased gross profit Photographer who showed her largest profit ever Changed target audience, prices, marketing strategy Interior Designer who tripled earnings Changed prices, focused services, improved collections Dreamers who launch small businesses

7 Less than 2% know that a Net Income Statement is the same as P&L?
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners Did You Know… Less than 2% know that a Net Income Statement is the same as P&L? Less than 1% know they run their business on gross margin, not revenues? Not a problem; an epidemic.

8 Is there enough cash to run the business?
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners The 3 big questions… Are you making a profit? Is there enough cash to run the business? Is the business building wealth or destroying it?

9 Three Key Gauges: Chapter 1 Net Income Statement Cash Flow Statement
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners Your financial dashboard Three Key Gauges: Chapter 1 Net Income Statement Cash Flow Statement Balance Sheet

10 What’s your industry norm?
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners Net Income Statement: Chapters 2 & 3 Making a profit or showing a loss Money in; Money Out Money In; Net Revenues from sales Money Out; Expenses to run the business Ratios help keep the business in balance Net Income Ratio Grocery store example What’s your industry norm?

11 or higher to stay in business
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners Gross Margin Ratio must be 30% or higher to stay in business 11

12 Your Business Could Be Showing A Profit… While Going Bankrupt
ACCOUNTING FOR THE NUMBERPHOPIC A Survival Guide for Small Business Owners Your Business Could Be Showing A Profit… While Going Bankrupt 12

13 Cash Flow Statement: Chapter 5
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners Cash Flow Statement: Chapter 5 Checkbook- starting cash, cash in, cash out, ending cash Gas in your tank- how far you can travel how long you can run the business w/o needing more cash Gas gauge doesn't tell you to buy gas You must interpret where the needle is 13

14 And Cash Aren’t the Same Delays in payment Discounts to payment
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners Why Revenues And Cash Aren’t the Same Delays in payment Discounts to payment Bankruptcies Book Net Revenues when they happen for accurate sales cycle reporting Book cash in when it arrives- accurate cash cycle reporting 14

15 Relationship building with clients
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners It’s Easy to Improve Cash Flow: Chapter 6 Invoicing policies Collections policies Relationship building with clients All affect cash flow- keep it healthy 15

16 Yes! What’s the Value of the Business?
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners What’s the Value of the Business? Just the salvage value of the desks, computers? Do businesses have terminal value? Can they be sold for more than annual revenues? Yes! 16

17 How to Win Friends and Influence Bankers! Chapter 8
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners How to Win Friends and Influence Bankers! Chapter 8 Balance Sheet- Net worth statement of the business Personal net worth- business net worth Relationship between what you own; what you owe Same for the business; relationship between assets (own) and liabilities (owe) 17

18 Net Worth=Owner’s Equity Chapter 9
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners Net Worth=Owner’s Equity Chapter 9 Positive Net Worth or Net Worth that increases over time Negative Net Worth or Net Worth that degrades over time Something must change to avoid bankruptcy How?

19 Not just read, interpret, make course corrections
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners Our Mission to Save Struggling Small Businesses Not just read, interpret, make course corrections Anticipate what will happen You're running the business The business isn't running you!

20 Norm Brodsky Interview with
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners Interview with Norm Brodsky Chapter 10 “A business is all about the numbers. Most businesses could make it if the owners knew even the very basics of reading their financial dashboard.”

21 Comments on NUMBERPHOBIC: So much fun to read! Fascinating.
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners Comments on NUMBERPHOBIC: So much fun to read! Fascinating. I'm tired of being a starving artist.. It should be required reading before anyone goes into business. It's so empowering. Women entrepreneurs especially need to read this book. They're afraid of debt but if they knew how to manage it, their businesses would be much more successful.

22 Understand your dashboard; reduce risk
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners Remember: The financial dashboard is your GPS Net Income- showing profit, break even, loss Cash Flow- enough to run the business/ how long Net Worth-building or destroying wealth Understand your dashboard; reduce risk 22

23 Twitter: @dfotopulos @bestbizhelp www.bestsmallbizhelp.com
ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners Available: Amazon.com Barnesandnoble.com Indiebooks.com @bestbizhelp 23

24 ACCOUNTING FOR THE NUMBERPHOBIC A Survival Guide for Small Business Owners
Join Dawn’s Mission Twitter: #knowyournumbers Live Stream: Tues. Oct 7th 7PM EST The King’s College, NYC https://new.livestream.com/TheKingsCollege/AccountingfortheNumberphobic Test Yourself: Ask questions Thank you!


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