Don’t wing it
Small businesses told finanial planning critical
A business executive here has warned that too many Barbadian small business leaders are unaware of their true cost of doing business or their cash flow situation, leading to the demise of many small businesses.
Chief Executive Officer of Dowell’s Advisory Services Inc Oral Dowell has told business owners it was time to “step it up a notch” when it came to financial planning if they wanted to become more successful, stressing that small business owners should seek to understand the “ins and outs” of their business’ financials.
He noted that small businesses should have solid financial structures, established key financial metrics and updated forecasts and budgets that could provide the critical information needed to manage their operations. He also cautioned that too many Barbadian small businesses did not know their costs per unit, breakeven points or even how to accurately calculate mark-ups. This, he said, was sending many small businesses down a road which could easily lead to business failure.
And commenting on the state of the small business sector in Barbados, Dowell said he believed small businesses in Barbados needed to “step it up a notch” and this was not the time “to be winging it.”
“Running a business without having a handle on the fundamental financial elements of your business is like a pilot flying a plane without a flight plan. The results could be devastating,” Dowell said at a recent Scotiabank Small Business Seminar and Expo.
Zeroing in on the importance of cash flow management for small businesses, Dowell said many Barbadian businesses did not have a handle on their cash flow and warned that poor cash flow management was causing more Barbadian business failures than ever before.
Dowell also noted that despite the challenging economy, businesses owners who were serious about becoming more “financially agile” could improve their chances of success by having a better handle on their finances and by truly understanding the critical financial indicators of their businesses.
“When it comes to entrepreneurship, there is certainly a role for gut feelings and instinct. However, this is not enough for long-term business success. Every business should establish . . . key financial metrics which help owners to track their business performance,” added Dowell.
Small Business Development Manager at Scotiabank Maureen Edwards shared similar sentiments.
“We host several seminars like this throughout the year to give small business owners the tools they need for success,” said Edwards.
She encouraged small business owners that instead of being intimidated by a challenging business environment, they should build strong relationships with their financial institutions and financial advisors. (PR)