During a RMA audioconference in October, Steve Abercrombie, president, Business Resource Services , discussed seven mistakes that small businesses make that can cause them to fail. Failure to plan properly before they start-up. Most people that go into business know how to produce a product or they know how to sell or service it. But they know nothing at all about the financial side of running their business. Failure to monitor their financial position.
Financial statements are an important tool for business owners to evaluate their financial position.
But many business owners don't know how to use them. Most just turn all the pages and look at the bottom line. And if it's positive, the statement goes in the bottom drawer. Financial review done. By contrast, the banker spends a couple of days reviewing the entire balance sheet.