Working ON your Business Vs. Working IN your Business

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Years ago, I had two contractors who were clients. The first contractor came into my office with a big box of papers. You know that shoebox you throw everything into? Well, this guy had a big moving box.

He was sure he didn’t owe any taxes because he didn’t have any money in his checking account.

So, my staff went through the box and after sorting it all out, we created an income statement so we could figure out the amount of taxes he owed. He came into the office and I presented him with his accounting and tax bill. He wasn’t very happy. Then I presented him with his tax bill. He was REALLY not happy now. He blamed me, he blamed his wife, he blamed the IRS – basically he blamed everybody.

That first year he was my client he made about $50,000 from his business.

A few weeks ago, another contractor came into my office. And guess what? He showed up with a big cardboard box. And he was sure he didn’t owe any taxes because he didn’t have any money in his checking account.

Does this sound familiar? My staff went through the box and after sorting it all out, we figured out his tax bill. He showed up and I gave him my bill. Boy, he wasn’t very happy. Then I showed him his tax bill. And he was furious! But, he did something very strange. He didn’t blame me or his wife or his dog or the IRS. Instead he asked the question that changed his life.

Would you like to know what that question was? He asked:

“What do I have to do to never have this happen again?”

And that question changed his life. So, today, I have a question for you, wherever you are right now, with a growing, prosperous business, appreciating investments or a struggling business and declining assets, is there something you would like to have never happen again?

There is a secret to make sure that happens. It’s education and action. Those are the two most powerful forces in the universe. And when it comes to making changes to your financial life, the second contractor asked the right question.

In fact, he learned an important lesson:

Money doesn’t solve money problems. UNDERSTANDING money solves money problems.

We began meeting every quarter and reviewed his financial statements, all three of them, together. He learned what it meant when a ratio changed or when a liability increased or how too much growth can be the worst thing that ever happened to his company. He stopped working IN his business and began working ON his business.

Five years later, the first contractor was still making $50,000 per year. The second contractor wasn’t. He now made over $1 million per year.

What was the difference? The second contractor learned how to understand his own financial statements to read his own story, and predict the future.

That’s why understanding financial statements is so important. I don’t want to teach you how to be an accountant. You don’t need to know how to debit or credit an account or how to run a software program. As a business owner or successful personal investor, you need to know ONE thing when it comes to your money – how to read your financial statements.

Every financial statement tells a story. In fact, there are three separate statements, each of which is vitally important to your business: the balance sheet, the income statement and the statement of cash flows. The Balance Sheet takes a snapshot. This is where you are, right now. It’s like stopping your car when you’re on a trip to get your bearings. What does that sign say? Where are you? How much further until you get where you need to be?

The Income Statement is a measurement of a cycle. It tells you the direction that you’re going in. It tells you whether you’ll be able to make the trip, long term. It tells you if the car is on the right road.

And the most important statement to determine your business’s short-term future is the Statement of Cash Flows. Do you have enough gas in the tank to make it to the next stop?

Each statement plays its part. No one statement is more important than another statement when it comes to measuring the ongoing health of your business. Put together, someone who knows the language of money can tell at a glance what is happening with a company.

In my opinion, one of the most important skills for any business owner or investor is the ability to understand financial statements. If you can’t understand your own story, how can you know what to do next?

For years, I’ve kept the price of my best selling course Understanding Financial Statements at the low, low price of jus $69. That’s because I believe this information is some of the most important information I can give you.

You’ve probably seen other courses that talk about financial literacy for $299, $399, even $799. But everything you need is in Understanding Financial Statements for just $69. It’s geared toward the business owner and/or investor, so you can fast track your investment of time and only learn what you really need to know as a business owner.

I hear almost every day from someone who tells me about the “ah-ha” they had when listening to this program. We’ve made this program available as a downloadable product so you can listen to it anywhere. And when you make the decision to invest in your financial future, you can immediately begin learning. Just go to Understanding Financial Statements to download your copy today.

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