050 - Financial Statements Made Easy - Without Numbers or Math
If you really want to have less stress and more money, then you NEED to understand your financial statements. In this episode, we’ll give you an overview of financial statements WITHOUT numbers or math so you can start using them to make better business decisions.
Show Notes
What are financial statements? (2:22)
Why do they matter, and what do I need to do with them? (4:40)
Financial statements let you know the score, but they also help you with the future. (8:00)
Story Time: What can happen if you don’t use financial statements to plan for the future. (11:27)
When do most business owners start trying to understand their financials? “When they’re about to die.” — M (13:08)
How do I actually get accurate financial statements? (16:22)
Cash vs. accrual accounting (18:39)
Why does it matter to have things categorized in your books? (22:40)
What accounts are in your books (assets, liabilities, equity, income, expenses), and what info is in each? (27:16)
They say I make money, so why don’t I have any?? (36:36)
Quotable Moments
“You didn’t get into your business to do numbers and math... You did it because you’re great at building pools or because you loved remodeling houses. Now, overnight, you have to become a business person who has to know the score, who has to look at numbers.” — K
“Financial statements keep the score... They’re showing you how you did. Am I succeeding, or am I failing?” — M
“As a business owner or manager, you want to know about the future. What should I do? And you can use information that’s in your financial statements to make better decisions about the future.” — M
“Cash basis is just a picture of today. Accrual basis is going to give you the full picture.” — K
“Your most important role as a business owner is to recognize good books. You don’t have to keep them, but you have to recognize them and then be able to use the information.” — M
Resources
The Profit Problem by Martin Holland
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