Life as a small business owner can be complicated. There are so many things to keep track of: the budget, checkbook, salaries, taxes, etc. If even one of these things falls behind, it can mean death for a small business. In fact, one fourth of small businesses fail after their first year. By the end of the fourth year, half of them fail.
While this unfortunate fate is common, it doesn’t have to happen to your business. By examining what causes small businesses to fail and acting accordingly, you can truly give your business a chance at survival. Let’s look at two important aspects of financial data analysis:
Financial Adviser: With the help of a financial analyst, you can find out where you’re wasting precious money and how to stop. They will also help you get a better grasp on budgeting and the complexities of your industry. When doing a financial data analysis, advisers will calculate total current assets and compare average industry ratios. They are able to tell you exactly what corners you can cut to save money and help you understand the intricacies of your profit margin.
Financial Analytics Software: 30% of businesses that fail do so because of unbalanced experience or a lack of managerial experience. They also expand too quickly and inadequately borrow money. To avoid this, many business owners are choosing to invest in software that helps them efficiently track complicated logistics. You can also compare the ratios within your industry to see how you stack up.
Between budgeting and planning software, business valuation software, and financial analytics software, there are many great resources at your disposal. If your small business is struggling, a financial adviser can help you get on the right path, guiding you every step of the way.