Balance Your Passion with Business Knowledge

Many small business owners and nonprofit managers would rather focus on what they do best and / or what they have a passion for - let's hope these things are one in the same. For example, if you are a computer repair technician operating as a sole proprietor, you might be inclined to just focus on finding and serving clients. However, having such a narrow focus as a business owner can prove to be fatal.  

A Few Questions

How do you know that you are not just spinning your wheels servicing clients' computers and taking in money only to spend more than you take in? If you are not tracking costs associated with providing your service, the answer is - you don't know.

If you own a commercial cleaning company, how do you know how much to charge a prospective client in a competitive bidding process in order to make a certain profit? If you are not familiar with job costing, then your bid is likely to be a gamble that may or may not lead to a profitable business arrangement with the prospective client - you might lose your shirt if you win the work!

If you are a nonprofit organization manager, how do you know what funding sources to go after to sustain your operations? If you do not have a comprehensive fund development plan that breaks down the ideal funding mix for your organization, chances are you are just chasing the money, which can lead to disaster if you have too many restricted pools of funding.

Know What You Need To Know

These are just a few general examples of how critical it is to know the business side of your business. It matters not the type of business you are in -  you must gain a basic understanding of business operations. What follows is a partial list of business concepts with which you must become familiar as a business owner or nonprofit manager:

1.       Budgeting & Forecasting

2.       Effectively Managing Employees & Contractors

3.       Analyzing Financial Statements

4.       Job Costing

5.       Understanding the Difference between Revenue and Cash Receipts

6.       Understanding Your Tax Obligations

7.       Market Analysis

The above list might seem intimidating. It is not my suggestion that you become a business guru. However, having at least a limited understanding of the above and many other business concepts will increase your ability to at least know when to ask for help as you make critical business decisions.

As you start-up, manage or grow your business, make it your business to gain the knowledge needed to be a successful business owner or nonprofit manager. This might mean taking business courses, or securing the services of a trusted business consultant that can advise you as you progress.  

By any means necessary, make it your business to know the business side of your business.   

I hope that these words have encouraged you to ease outside of your comfort zone and acquire the knowledge and support you need to move forward!

Please check in on my blog periodically for helpful business related tidbits. In the meantime, be well and prosper!