financial statement – Bada Business

5 Effective Tips For Entrepreneurs To Handle Stress

Summary: Chronic stress, as much as we don’t want it, has become an integral part of our modern-day lifestyle.

In today’s era, stress has become an unwanted part of our lives. From students to entrepreneurs, employees to employers, job seekers to housewives, everyone seems to be stressed out these days. Where stress can act as a catalyst and compel us to perform our best, most of the time it harms our physical and mental health.

There are many leaders and business owners who wear burnout, working weekdays, and overworked minds as a badge of honor. This is the reason why most employees today don’t feel in control; rather, they feel beholden to the demands of their employer. Many successful motivational speakers advocate for work-life balance but seldom do they follow it on their own.

Many entrepreneurs worry about their business especially when it is going through tough times. And because business owners must ensure that both their employees and the organization overall are well taken care of, they worry about whether they’ll have enough left over at the end of the month to cover payroll and operating expenses.

While some financial stress is inevitable, it doesn’t have to be an all-encompassing, omnipresent concern. Here are 5 effective ways in which entrepreneurs can better cope with stress and enjoy their business journey:

1. Utilize the Power of Now

Stress is multidimensional. Staying present and incorporating the power of now is the only way to bypass any stress, especially stress related to finance. Only focus on the present and stop worrying about the future. Tell yourself “anything is possible.” Look around and you will find ideas, suggestions, and solutions to any challenge that you are facing. You can also take help from a business coach if you are seeking professional guidance.

2. Empower Your Teams

Many believe that being an entrepreneur means bearing the brunt all alone. However, you don’t have to bear the responsibility of ensuring the smooth operations of your business all alone. You can empower your team so that they can contribute to achieving your organizational goal. One way this can be done is by showing them how their jobs directly affect the bottom line. This will make them more efficient, effective, and creative, which will increase revenue and ensure the employees and your business is well taken care of.

3. Collaborate with Business Mentors

A lot of times help from professionals can add valuable insights to the potential stresses ahead. There is safety in the counsel of business mentors. Along with providing roadmaps to avoid various business challenges, a mentor can also be a pillar of excellence.

4. Keep a Tab On Financial Statement

One of the major concerns for every entrepreneur is their financial statement. Reduce financial stress by knowing your numbers. Some key numbers include monthly and annual profit and loss, balance sheet, monthly cost to operate, annual forecast, accounts payable, accounts receivable, number of proposals, number of clients, win rate on proposals, and customer acquisition costs.

5. Have an Adequate Safety Net

Always ensure you have adequate safety in terms of savings as it can go a long way in handling financial stress. We all understand the drive to put your money to work, but the ease of mind a safety net can bring often outweighs the value investing that money could bring. By lowering your financial stress levels, you’ll start working more effectively and making long-term plans.

As entrepreneurs, it’s easy to fall into the trap of treating every day financial issues like existential ones. That’s why you can use mindfulness exercises and meditation to see problems from the outside. Do not forget to exercise regularly to regulate your body’s response to stress.

The idea of managing a business is easier said than done and we completely agree with you. This is why to help you move forward with your business goals, we at Bada Business offer an exclusive Business Coaching Program that comes with Foundation courses, specialized courses, and value-added courses.

To know more about this program, visit: www.badabusiness.com

3 Important Financial statements Every Business Owner Should Know

3 most important financial statements for your Business

Trying to run a business without keeping a check on the Cash flow, Balance sheet and Profit and loss statement is like driving a car without the engine. It is critical to understand this concept to plan the future and manage your operations and taxes. It is also important to keep your financial health in check as your investors might ask for these statements at the time of fundraising and you don’t want to have enough cash in your business. Financial statements are the best source to evaluate the weaknesses and strengths of your company’s financial health.

Let’s understand each of these important financial statements in detail:-

1. Cash flow

7 out of 10 start-ups fail because of poor cash flow management. Running out of money is the most critical situation where most of the start-ups fail. You always need to know where the money is coming from and where the money is going. A Cashflow financial statement helps your business to identify the risks while moving forward. It also records all the relevant activities for the current period. Cash Flow management is the amount of cash collected and used by a company during a period and is one of the most important aspects to understand running a business. You are going to put your business in a very dangerous position if you don’t stay on top of your cash flow.

Let’s break down cash flow into 3 important financial statement categories:-

Operating cash flow – The money which is coming from normal business activities.
Investing cash flow – The money which is coming from investing activities like- Property, Plants, stocks, equipment, etc.
Financing cash flow – It includes transactions involving e
quity, debt and dividends.

2. Balance sheet

The balance sheet reflects the financial statement of your company. It is a combination of your company’s assets and liability. If both assets and liability match then only your account is balanced. Let’s understand the balance sheet–

A balance sheet helps in determining the financial stability of your business. Investors and creditors always analyze the balance sheet of your company before investing. A balance sheet also indicates the unexpected expenses and your liquidity position.

Asset + Liability = Equity (It shows the basic accounting equations)

Assets – Asset includes inventory, investment, equipment and machinery, cash, account receivables and checking account. Assets are the resources that are owned by the business owner and can be measured.
Liability – Liability includes things that you owe to others like- loans, share capital, surplus, payroll, etc.
Equity – Equity includes the capital investments that you have made in the business.

Look for these items when reviewing the balance sheet:-

Negative Balance
Balance which seems too low or too high
Balance in the account that must be zero
Balance in account payable (AP) and account receivable (AR).

3. Profit and loss statement

Profit can be made when your revenue exceeds costs or expenses but if the cost exceeds revenue then a loss is projected.

The profit and loss statement records the performance of your business and shows the result if the company is financially healthy or not.

The profit and loss statement shows where the money is being allocated and also breaks down the business cost into categories for your financial statement.

Let’s look at the components of profit and loss:-

Income – It refers to the revenue earned by your company by the core operation and secondary sources such as interest income.
Cost of goods sold – It includes the costs related to the product sale in your inventory. The cost of goods sold is also known by the cost of sales.
Gross profit margin – Gross profit margin is the difference between the revenue and the cost of sales. It indicates the ability to cover the remaining expenses apart from the cost of sales.
Operating expenses – It includes selling, administrative, salaries, and general expenses.
Operating income – It comes by subtracting the operating expenses from the gross margin.
Depreciation – It reflects the reduction in the value of an asset like equipment that is being used to generate income.
Interest – Interest refers to the cost of borrowing funds to finance the business’s assets.
Net Income – It reflects the company’s bottom line. If the company’s expenses exceed then it will be recorded as a net loss.

These Important Financial statements are critical to evaluate the performance of your business yearly. As a business owner, one must know the basics of these important financial statements to understand the monetary health of your company. It will also help you to take the necessary decisions on time.