The #1 Piece of Business Knowledge Entrepreneurs Wish They Knew – Part 1

December 29, 2008 at 6:03 pm 7 comments

This series is fueled by a single question asked to successful entrepreneurs:

“What is the #1 piece of business information you wish you had known when you were younger?”

Today’s answer: Money management training.

What does “money management”  mean?  Here is some detail from successful  successful Chicago-based entrepreneur Seth Frey:

“Sales and marketing were really easy to me. That just came naturally. As far as money management, that was harder. Even when I had my ice cream truck in college I still didn’t get it.   I would think, ‘Oh, we have $1,000 in cash.  Let’s pay off all our vendors.’  What I should have done is had more of a cash flow strategy.  For instance, I should have extended terms with the vendors and held the rest as a cash reserve.”

Suggested readings and discussion questions for the classroom to the boardroom:“Wish you knew” Module #1.

1. What does Seth mean when he says he should have “extended terms” with the vendors?

2. Read the article at the below link:

http://ezinearticles.com/index.php?Protect-Your-Business-with-These-Cash-Flow-Rules&id=1031911

Design a discussion around the four header topics of the article (e.g., what does each category really mean, and proposed action steps for each).  How does what Seth did seem to be in line, or different, with the advice in the article?

3. Read the below articles and/or search for additional ones using terms such as “cash flow”, “small business”, “best practices.  Each participant should find their top article, and summarize the top 3 money management tips in that article. Narrow in on cash, accounts receiveable, etc. as needed.

http://beginnersinvest.about.com/cs/investinglessons/l/blles3intro.htm

http://entrepreneurs.about.com/od/financing/a/finstatelender.htm

http://www.balancepro.net/education/publications/moneytipssmallbusiness.html

Templates

Cash Flow Budget Template

Source: www.Toolkits.com

Breakeven, Cashflow, and Startup Cost Template

Source: Bay Area Community Foundation

 Balance Sheet Template

Source: US Chamber of Commerce

Profit & Loss Template

Source: Microsoft templates

For more on financial planning exercises, see the Young Entrepreneur Foundation Entrepreneur in the Classroom “financial plan” curriculum in Module 3. Here is more on the free EITC curriculum.

Part 1 in this series

Part 2

Part 3

Part 4

More information

Know a Young Entrepreneur? Nominate them here.

The NFIB Young Entrepreneur Foundation is a 501(c)(3) organization promoting the importance of small business and free enterprise to the nation’s youth. More information is available at www.NFIB.com/YEF. The Foundation is associated with the National Federation of Independent Business; NFIB is the nation’s leading small business association, with offices in Washington, D.C. and all 50 state capitals.

Entrepreneur In The Classroom. The NFIB Young Entrepreneur Foundation Entrepreneur-in-the-Classroom (EITC) supplemental curriculum exposes students to entrepreneurship and the necessary steps to take an idea and turn it into a business. The free curriculum can be integrated into classes teaching a variety of subjects including music, art, fashion, business and many more. You must be registered to view the full Entrepreneur-in-the-Classroom curriculum.

Related links:

Follow NFIB Young Entrepreneur Foundation on Twitter

Follow NFIB on Twitter

Follow blog author Kathy Korman Frey on Twitter

Entry filed under: Business exercises, Entrepreneur, Uncategorized. Tags: , .

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