Some business owners lack key financial knowhow, survey finds
I read this article by Lisa Wright in The Toronto Star in January, and I can’t get the facts out of my head. How many businesses in the meetings and events industry are comprised of less than 10 employees? How many are a single person who orchestrates with many suppliers to get the job done?
How many people can put up a shingle and say they can plan events, meetings and conferences and don’t have any financial literacy? According to the Inuit Canada Survey, 39 per cent of small business owners failed a 10 question financial literacy quiz, and 57 per cent achieved a score of 50 per cent or less.
On many levels this is very scary. If you are a larger company hiring a smaller company you’d want to know they are financially secure, understand the finances of an event and of business in general. If you are that small business, for survival, you need to be financially savvy.
What does that financial savvy include? This is just my opinion. Ask your accountant. You do have one don’t you? If not, get one!
- Know when it is best to be incorporated.
- Ensure you register your company with the government.
- Ensure you have an HST number and pay your HST as required, or you will pay penalties.
- Keep track of all your expenses – not in shoe boxes – in file folders, properly labelled.
- Keep track of all your income – properly invoiced to clients.
- Create a simple accounting process you complete each month. (There are many on the market – QuickBooks seems to be the mainstay of both small and large companies.)
- Discuss your financial planning and forecasting with your accountant. There’s that word again! As a planner, you want companies to hire you for your expertise — why wouldn’t you hire an accountant for their expertise?
- Create a relationship with a bank. While online banking is great, walking into a branch where they know you can help in times of need can be a huge plus.
Just because you are a great planner doesn’t mean you are a financial wiz. Get the help you need. Build up your financial savvy.
