By Katherine Pilnick
If you’re drawn to the idea of not having to report to anyone, setting your own goals and hand-picking your co-workers, you may be interested in becoming an entrepreneur. Starting your own company can be highly rewarding, but a successful business requires much more than a good idea.
It calls for thorough professional know-how, which means you’ll have to know about every aspect of starting and running a business. You’ll also have to lean on your financial literacy in order to make your business profitable.
Why Are Finances So Important?
A strong economic and financial foundation is the key to a successful and profitable business plan. The goal of any business is to be as profitable as possible. This means a financial understanding affects every part of business, both day to day and long term. It affects aspects like salaries, profitability and operation costs.
It can also help you when you initially launch your business, as you may be able to apply for grants or loans, either through the U.S. Small Business Administration (SBA) or through private lenders like banks.
Of course, you can work with an accountant or financial planner to help you analyze data and make decisions. Still, it’s up to you as the business owner to keep track of how your business is going, as well as make pertinent financial decisions.
If your company grows and you eventually have shareholders or a board of directors, you’ll typically have to update them on a regular basis. You’ll be responsible for relaying company updates like profits, sales and internal changes.
Building Your Financial Foundation
You may already have some idea of economics, finances and math. However, it’s always a good idea to brush up on old skills or acquire new ones. High school students often have the opportunity to take classes like economics to learn basic skills early.
If you’re out of high school, look into related college courses. Whether you are currently in school or simply looking to take a few classes at your community college, you’ll be able to find courses to suit your needs – and your budget.
If you’d rather not commit to a class just yet, look into free information online, such as through the SBA, and take advantage of your local library’s selection. You can also look into the President’s Advisory Council on Financial Capability, which aims to help educate Americans on financial matters and improve access to financial education.
These are important options for those who may not have strong educational opportunities; you can receive the information you need without a traditional education, but you must be dedicated and hard-working.
Wherever you are in the process of starting your own business, you’ll do better if you’re equipped with a strong financial understanding. Start thinking now about how you can reach your goal of becoming an entrepreneur.
Katherine Pilnick is a writer, blogger and editor for Debt.org, America’s Debt Help Organization.