Dowell noted that if small business owners were to be successful, they must understand their business’ financials “inside and out”. He noted that small businesses should have solid financial structures, key financial metrics and updated forecasts and budgets that could provide the critical information needed to manage their operations.
He cautioned that too many small businesses didn’t know their costs per unit, break even points or even how to accurately calculate mark-ups. He said this was sending many small businesses down a road which could easily lead to failure. Commenting on the state of the small business sector, Dowell said that he believed that small businesses need to step it up a notch.
“This is no time to be winging it. Running a business without having a handle on the fundamental financial elements of your business is like a pilot flying a plane without a flight plan. The results could be devastating.” Zeroing in on the importance of cash flow management for small businesses, Dowell noted that in his experience, many Barbadian businesses don’t truly have a handle on their cash flow.
He observed that poor cash flow management was causing more business failures than ever before. Maureen Edwards, small business development manager at Scotiabank, agreed that in order for business owners to be successful, they needed to have a firm understanding of their operations and their financials.
“This is why we host several seminars like this throughout the year – to give small business owners the tools they need for success,” she noted. She said that instead of being intimidated by a challenging business environment, small businesses should build strong relationships with their financial institutions and with their financial advisors.