November is Canadian Financial Literacy Month, which is the perfect time to brush up on your small business financial skills. Poor financial literacy can make it impossible to successfully run a small business in Canada. And according to The Lendified Index, one of the greatest concerns of small business owners is managing cash flow. If small business owners don’t understand the fundamentals of their business finances, they may find themselves in some serious financial trouble.
Some major subject areas to brush up your financial education are:
- Money Management and Budgeting: Better business begins with smart money management. If you don’t know the terms and uses for essential tools like balance sheets, you might find yourself coming up short when bills are due.
- Property Leases and Insurance: What are you responsible for and what does insurance cover?
- Small Business Banking: Understanding the Canadian banking system as well as the products and services available to small businesses is key
- Taxes: You need to understand what you need to keep and file away for tax season, and develop strategies for tracking expenses and revenue
- Credit and Debt Management: As a small business owner, you must know and understand your business’ mix of debt and equity
Some of this information may seem overwhelming or new, or you may feel you are already fully financially literate - but there is always more to learn. Test your financial knowledge to see where you stand today and how you compare to others by taking the taking one of these self-assessments:
- Intuit’s financial literacy quiz.
- BDO Canada’s Self- Assessment Tools
- The Financial Consumer Agency of Canada’s Financial Literacy Self-Assessment Quiz
A better understanding of your small business and personal finances will given you more confidence and help minimize risk of costly errors. Take charge of your financial education - after all, the key to your small business success is you.