Archive for August, 2018

600.png

Entrepreneurs bring all sorts of skill-sets to their venture, such as the ability to sell, or to organize activity, or to raise funding. Some might have a business background, but others might need to learn the ways of business while on the job. Here are 14 terms you and every entrepreneur should know, because they involve central concepts that affect your business.

Accounts receivable:

Money owed to your business by clients. Typically, you invoice a client and receive payment some time later. An account is receivable until it is paid.

Assets:

Economic resources your business owns. Current assets are items like cash, receivables and inventory. Long-term assets include equipment, buildings, vehicles, furniture and patents. You utilize assets to generate income.

Capital:

These are the total resources available to your business, and is equal to your equity and debt. Working capital is equal to current assets minus current liabilities, and represents the resources available to run day-to-day operations.

Cash flow:

The movement of money into, through and out of your business. Inflows bring in money and include collections of sales revenues, tax refunds, and interest earned. Outflows are expenditures of cash and include payment of expenses and acquisition of assets.

Depreciation:

The decrease in the value of long-term assets due to the passage of time. Depreciation is a tax-deductible expense that spans a set number of years.

Equity:

Your ownership interest in your company. It is equal to your assets minus your liabilities. Equity is evidences by stock shares distributed to owners based on their percentage of ownership.

Expenses:

The costs of running your business, including rent, salaries, legal costs, advertising, taxes paid, and utilities. A good business tries to minimize expenses while not skimping on essentials.

Financial statements:

Highly structured reports that indicate your business’ financial condition. They include the balance sheet (a snapshot of assets, liabilities and equity), income statement (revenues and expenses for a given period), and cash flow statement (inflows and outflows for a given period).

Liabilities:

Debt owed by your business. Current liabilities are due within one year and include obligations to pay credit-card balances, invoices from suppliers, taxes due, and wages earned but not yet paid. Long-term liabilities include mortgages and loans that mature in more than one year.

Losses:

Negative net income, created when your costs exceed your revenues. If you have too many losses, the chances are that your business will fail unless you have other sources of funds.

Profits:

Also called net income or the bottom line, these are revenues minus costs for a given period. Profits can be drawn off by owners or accumulated in an account called retained earnings. You can use profits to expand your company.

Revenues:

Also called gross income and sales, this is the money you earn from operations. You direct your marketing and sales activities to generate revenues.

Valuation:

A number representing how much your business is worth. Valuation is important when you are seeking funding from investors.

You don’t need to be a financial expert to have a successful business, but knowing basic financial terms will help you communicate with other stakeholders. For those wanting to broaden their knowledge, the Internet is loaded with learning resources, and many colleges offer continuing education courses that might be useful.

This article originally appeared in IOU Financial.

 

This article was written by Robert Gloer from Business2Community and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

download (5).png

Leadership can be defined in many ways. Regardless how you define it, a true leader will be the difference maker between success and failure of a business. In this post, we’ll take a look at seven qualities all great business leaders have in common. That way, you’ll know what separates the good leaders from the bad ones.

They take initiative

Great business leaders are self starters. They don’t wait around for others to get the job done. Especially if the task means creating value for themselves or the organization they belong to.

Just because you hold a high ranking position doesn’t mean you’re above trivial tasks. For example, the co-founders of Lyft uphold a tradition where they drive passengers as if they were one of the thousands of Lyft drivers supporting the business they built. They do this because they want to constantly improve the experience for both riders and drivers.

Could they have asked members of their internal team to drive and gather feedback? Of course they could have, but instead they took the initiative to take care of it themselves. This shows great leadership at the highest level of business.

They have vision

In business there will be tough days. There will be months where the company is barely getting by. During these tough times your team needs to dig deep and truly understand the bigger picture. As a leader it’s up to you to help them see that vision.

The vision needs to be big enough so you can inspire others, but also broad so your team can feel personally included. This way everyone in your organization knows the importance of their own role and the effect it has on bringing that grand vision to a reality.

They are resilient

Building a company is probably the least straightforward path you can pursue in life. Ask any successful entrepreneur about their journey. The majority of them will tell you about the countless times they’ve failed before they found that one success. The reason they finally made it? Resilience.

The workplace is full of challenges and unexpected changes. The individuals who have resilience have the ability to take good risks and are welcome to change.

They have a high emotional intelligence (EQ)

Emotional intelligence is the ability to identify and manage your own emotions and the emotions of others. If you’re able to understand, manage, and navigate not only your own emotions but those of others, you have the makings of a great leader.

Let’s take sports for example. Think about the coaches and managers of world-class professional sports teams. With a team full of star-studded athletes how much coaching of the game do you think they need? Aside from basic strategy and tactics it really comes down to managing and navigating your teams’ emotions. More specifically their egos. If you took a group of the best coaches and managers of all time, I can almost guarantee they all have a high emotional intelligence.

As a leader in business it’s extremely important to develop and improve your emotional intelligence. You need to make an effort to understand reasons behind an employee’s behavior. Let’s say their productivity has been slowing down. Are they losing interest in the job? Do they feel like they aren’t being challenged? Are they angry at the company or another member of the team? The more you can understand them on an emotional level the easier it’ll be to engage with them and resolve the issue.

They are confident in their decision-making

If you don’t like being the decision maker then you don’t belong in a leadership role. That may sound harsh but it’s the truth. Leaders make countless decisions throughout the day. Some hold little weight, and others may decide the fate of their entire company.

The ability to make a decision and stand behind it, is a quality that is shared amongst all great business leaders. And by stand behind it, I mean take responsibility for the decision they made regardless of the outcome.

They are truly enthusiastic about their business

True and authentic enthusiasm for a business, it’s products, and overall mission is not something that can be easily faked. Especially for the amount of time it typically takes for a business to be built. Your employees will be able to instantly recognize whether or not you’re truly passionate and enthusiastic about what you’re trying to build.

Let’s take our real-life Tony Stark for example. Who might that be? You guessed it – Elon Musk. Think about his track record. Disrupting the payments landscape with PayPal. Reducing our dependencies on fossil fuels through clean energy and transportation with Solar City and Tesla . Then he decided to go shoot rockets into space with SpaceX.

The greatest trait about Musk is that he’s truly enthusiastic about what he’s building. He’s so sincere, that he’s even willing to put the vast majority of his own money behind his companies. With all that said, you can only imagine the effect that has on those who work with him.

They have great communication skills

As a leader you need to be able to motivate, discipline, and instruct the people you are in charge of. If you lack communication skills you won’t be able to accomplish any of those things.

Communication has many pieces to it. For example, did you know that listening is an integral part of communication? How can you effectively respond to others if you don’t take the time to listen? As a leader you need to listen to the members of your organization at every level. You need to be able to communicate whether it’s a one-on-one conversation or a company-wide keynote to your 10,000 employees. If you can’t develop these skills, you’ll have difficulties inspiring others to follow.

Great leadership qualities aren’t developed overnight. In fact, many of the great business leaders still make mistakes all the time. That said they’re still humble, still learning, and continuing to build their empire.

This article originally appeared in Calendar.

 

This article was written by Angela Ruth from Business2Community and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.