Tracking and Measuring Success
When you first dreamed of starting your own business, you may have thought about happy customers, the luxury of being your own boss, or building a nice chunk of wealth for your family. All those things are possible, once your business starts to take off. Getting it to that point, though, means doing something that gives many people queasy stomachs: working with a lot of numbers.
Underneath every business success story — from the tiniest home-based business to the largest Fortune 500 corporation — are numbers and reports and some math. Behind many business failures is a failure to work with and understand these numbers. With a working knowledge of the basics, you can avoid that fate and watch your dreams come true.
You probably already do some basic accounting in your personal life:writing checks, paying bills, balancing your checkbook. Business accounting is not much different. In fact, it really just builds on those everyday activities and takes them a few steps further. Accounting gives you a way to figure out what those numbers mean in terms of your business, and it shows you how they work together to measure your company's financial health. It lets you track all the important numbers, such as sales and expenses. It helps you truly measure how well your business is doing, which may be quite different than how things appear on the surface.