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    Basic Rules of Finance for Small Businesses
    Basic Rules of Finance for Small Businesses
    Basic Rules of Finance for Small Businesses
    Ebook69 pages39 minutes

    Basic Rules of Finance for Small Businesses

    By Paul O. Beale

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    About this ebook

    Basic Rules of Finance for Small Businesses is a practical guide for small business owners and operators. It is a set of 34 rules that cover the sphere of small business financial considerations. These rules are, however, not exhaustive but for all intent and purposes, they provide a good road map into the world of small business financial management. The rules focus on the discipline necessary for operators to stay in line with well thought out financial objectives.

    LanguageEnglish
    PublisherPaul O. Beale
    Release dateJul 23, 2016
    ISBN9781370177929
    Basic Rules of Finance for Small Businesses
    Author

    Paul O. Beale

    Paul O. Beale is a creative writer, filmmaker, actor and trainer. Since 1989 he has trained thousands of small business owners and operators. He has also trained persons in screen acting, public speaking, IT and managerial accounting. Mr. Beale is trained in Marketing, Finance and Banking. Over the years Mr. Beale has written a number of stage plays, TV shows and films (Destiny - the movie). He continues to write and these days he is focussed on writing novels, small business training, screen acting training and filmmaking in general....

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      Book preview

      Basic Rules of Finance for Small Businesses - Paul O. Beale

      Introduction

      A business is essentially a system of commercial activities that revolve around income and expenditure. The end result of all these activities is either a profit or a loss. It is reasonable to assume that the main objective of a small business operator is to make a profit. That assumption is the foundation of the rules that have been laid out in this book.

      A business has many facets to it and marketing and finance are the two most important of these facets. Marketing is the identification of consumer needs and wants, the development of products and services that will satisfy these needs and wants and to allow the subsequent distribution of these products and services at a profit or in such a manner that allows the business to continue the provision of these products and services over time. That is a pretty comprehensive definition, but so too is the marketing function. Finance, on the other hand, is the management of capital, expenses and revenues with the ultimate aim of achieving a surplus of revenues over expenses and to ensure that these various transactions are recorded in a manner commensurate with statutory requirements and with the requisite accounting standards.

      From those two definitions, one thing is very clear. Marketing and finance exist in a symbiotic relationship. This means that these two operations depend on each other for the success of the business, similarly to how the heart and the brain work together for the body to operate optimally. In this manual, we will focus on finance, more specifically, the Thirty (33) rules of small business finance.

      Small businesses in Jamaica suffer from a number of problems. Some of these problems are due to the shortcomings of government policies while others are due to the inadequacies of the small business operators and owners. These include; the lack of business training, lack of knowledge about sources and types of funding, improper use of funds, poor marketing, poor planning and poor financial management.

      The purpose of this book is to provide a guide for the avoidance of some of the aforementioned pitfalls. These guidelines are put forward in the form of rules accompanied by thorough explanations of these rules. This format was chosen to ensure that the reader focuses on one specific issue at a time. However, while each of these rules must be taken on its own merit, there are serious inter-relationships between the rules, which should be observed by the reader. While we consider these rules applicable and relevant to most if not all business situation, we do not consider them the end of the story. We expect that each business operator will apply his/her keen considerations to the peculiarity of the business such that operations may be optimized. N

      The Rules

      Rule # 1: Register your business before you start operations.

      It is required by law that all businesses whether profit or non-profit be registered with the Companies Office of Jamaica. If your business is not registered, it is legally speaking, not a business. In most situations in order for you to open a business bank account or do business with the utility companies and even to rent/lease office space, you will have to have a registered business or business name.

      In order to register your business, you may choose one of two means. Either you register your business name as a sole trader in which case, your status is a sole trader. As a mere business name, you operate under the Trading as status, meaning that your business is not a limited liability company. The alternative is to register the business as a limited liability company. This second option is the better option because your liability in the business is limited to your investment in that business (you may still be personally liable under special tax legislations, however). Should someone successfully sue the business, your personal assets may not be affected. If you register only the business name and you should do business as a sole trader, you could find that you and your personal assets are exposed to claims by others. No business can grow and be successful if it not formally registered.

      The registration process is easy. You may choose to go to the Companies Office and fill out the forms with the guidance of officers at the Office or you may ask your accountant or an attorney to have it done. If you choose to ask for professional assistance, be reminded that a fee will be incurred. In the case where you are registering a business with multiple owners, you may want to include special provisions in view of future possibilities regarding death, transfer of shares and other company matters. In such a situation, it may be a better idea to choose a professional such as a lawyer to have the registration process looked after.

      Rule # 2: Know the kind of business you are in.

      If you operate a bar, what kind of business are you in? If you are inclined to think that you are in the bar business or the liquor selling business, you would be short changing your vision of the business. In order to come to a clear understanding of the type of business you are in start with this question; Why do people come to a bar?ﾝ I am certain the answer is clearer to you now. Now you

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