Chapter 8: Using Financial Statements to Guide a Business

This chapter, to me, covers what I believe is the root of many small business failures. Like I stated before in my last post, there are many ideas that are good ideas that are simply not feasible. In this case, we will say that an idea is feasible and the business has already started, things look promising. If the owner of this business does not know how to make or understand an income statement, cash flow statement, or balance sheet, this "great idea" is doomed to fail.----Of course, after typing that last statement, I rememberd a tool that many small business now use to keep track of all three of these statements...Quickbooks. Quickbooks has really taken the guess work out of using these statements. The software is so easy to use, and it can really meet all of your regular accounting needs. Now, with that being said, I know from personal experience that there are still many small business owners to don't keep accurate records. Since the creation of Quickbooks and the other slew of programs that do the same thing, there is really no excuse for a "mom-n-pop" business to fail because they had cash flow problems that could have been addressed had they known the severity of.