“Never take your eyes off the cash flow because it’s the lifeblood of the business.”
– Sir Richard Branson, business magnate, author, investor, philanthropist
Have you ever seen someone’s eyes light up when they talk about cash flow? That was the case during a recent conversation between The Starting Point and Vermont Small Business Development Center’s (VtSBDC) consultant Carol Feliciano. Carol, founder and owner of 802 Books and Taxes, shared her passion for financial literacy and provided clarity on why “cash flow is king” for every business.
Most entrepreneurs are motivated by ideas and innovation, powering forward with a long-term vision of financial success. But how do you get from here to there? Understanding and embracing that vital connection between desired business outcomes and financial intelligence is a multi-faceted process that to some may seem very complex. Until now. Recently, Carol teamed up with VtSBDC advisor Ross Hart to share their affinity for numbers and why they matter in a friendly, accessible video format titled Know Your Number$. With its straight-forward, approachable tone, the relatable seven-part series reinforces one undeniable fact: working knowledge of your business’s financials (and how to navigate the information they provide) is your greatest tool for sustained success. Nothing else will give you a more accurate assessment of how your business is doing.
“Know Your Number$ is a response to a need my colleagues and I identified based upon our years of working with clients,” said Ross. “And that is that the number one obstacle standing in the way of small business success – a lack of understanding of what their key financial reports are and what those reports are telling them. Know Your Numbers$ is designed to help the less financially inclined learn how to grasp the basics of finance so they can make data driven business decisions.”
Following are excerpts from The Starting Point’s conversation with Carol to learn more about her background, how she conveys her passion to inspire VtSBDC clients, and why clients should watch the video series over and over again in addition to meeting with their advisor.
The Starting Point: How has your professional experience brought you to this moment?
Carol: It may surprise you that I originally wanted to be a psychiatrist. I started off with a psychology degree from Siena College, but soon found my true career path when I started taking business classes. This ultimately led to a management training program, and an MBA in Finance from Virginia Commonwealth University. As one of the first women in commercial real estate lending at Bank of America, I had the opportunity to work on loan packages from $10 million to $100 million to help prepare companies to go public. In my career, I have also served as a CFO and started two businesses. I have always enjoyed the thrill of getting to know clients and to guide them – learning along the way that large corporations often face the same financial literacy challenges as smaller businesses, just on a different scale.
The Starting Point: How has the work/life balance influenced your work?
Carol: When I wanted to raise my family, I made the transition from the corporate setting to owning my own business. That was an important choice for me and has worked well for my professional and personal life. We have three children, one of whom has autism, and my work at home in behavioral therapy has carried over to my work life. That kind of training with my daughter, as well as my psychology degree, helps with the training of clients, offering a safe, approachable atmosphere in which to learn and grow,
The Starting Point: Getting to the crux of the matter, why is it so important for business owners to know their numbers?
Carol: Knowing your financials is the key to everything. I love working with clients and mentoring college students, watching the light go on in their faces when they realize that understanding the big picture and zeroing in on the margins will make their business profitable. The concept of working capital, and giving clients the language they need, provides them with the building blocks toward success. It really is thrilling! The essence is that it doesn’t matter what size your business is – if you want to be profitable and want to avoid errors, listen to “Know Your Number$” again and again until it is completely familiar. The model doesn’t change for any business. The video series highlights what you should be looking at, and how to look at financial trends. The trends are key – look at your financials every month and understand what they mean. Understand your net profit. And pay special attention to your cash flow statement. They always say, “The top line is for show, the bottom line is for dough.”
The Starting Point: Any other words of advice for Vermont’s small business owners?
Carol: Yes, two important tips. One, spend some “low tech” time writing down your numbers so you can see trends over time – kinesthetics before technology. And, two, we encourage you to watch a section and then set up a meeting with your local VtSBDC advisor to review your financials. That way you will be able to interpret your financials, and have a great foundation to analyze your numbers from a different perspective.
More about VtSBDC’s Know Your Number$:
Vermont Small Business Development Center (VtSBDC) has created a helpful resource: “Know Your Number$,” a seven-part series innovated to help business owners at every stage identify their financial goals and interpret the language of business. The series is designed to alleviate intimidation about important financial knowledge and to help business owners and managers understand reports, leading to more logical, timely, and informed decision making.
The seven areas of financial intelligence addressed are: Revenue; Expenses; Profit and Loss (Income Statement); Balance Sheet; Key Financial Metrics; Cash Flow Management; and Basic Financial Management. With an engaging mix of slides, images, and narration, Ross Hart and Carol Feliciano illustrate real life examples of how the financial principles are applied, and pose the questions business owners need to answer in order to clarify their goals, assess their financial options, and determine how to move forward.
To access the Know Your Number$ series, visit https://www.vtsbdc.org/know-your-number/
The Know Your Number$ advisor/accountant-guided modules introduce the basic financial statements and how to use them. The modules are short, with specific examples, and can be used as an introduction if you are completely new to the financials or as a review if you have a working knowledge you would like refreshed (no matter what sector or stage of business). After watching all seven parts of the series, viewers are encouraged to set up a meeting with their advisor to interpret their numbers and to talk over the next steps in making important decisions for their business.
Looking for more? Check out our resources page or request advising!
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