"Think of your business as a garden," I tell people.
It helps take the complexity out of the financial jargon.
Where you are today with your business may not be where you want to be tomorrow, but it’s shaped by the seeds you're planting today.
Hi, I'm Mahmood Reza from Numbers Knowhow and in this episode of the Numbers Knowhow podcast, I've boiled it all down to simple terms.
Whether you’re just starting out or trying to scale to new heights, understanding the fundamentals like revenue, profit, expenses, cash flow, assets, and liabilities is crucial.
Think of them as the vital elements for nurturing your business garden.
By the end of this episode, you'll have a clearer picture of what it takes to grow a healthy, profitable business.
You’ll feel more in control and less overwhelmed, enabling you to make better financial decisions.
Remember, we’re here to help you Plan It, Do It, PROFIT.
Transcripts
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Think of your business as a garden.
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Imagine your business is a garden. Just like plants need
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water and sunlight, your business needs money to grow. But in the
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business world, money has its own language. Financial
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jargon. Let's break it down simply. Revenue.
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It's those seeds that you plant. Revenue is the money
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your business earns from selling products or services. And just
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like seeds, the more you plant, that is sell, the bigger your
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garden. That is your business will grow. Profit. Think of that
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as the fruit you harvest. Profit is what's left after you pay
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for everything else. Think water, think soil, think
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tools. It's the reward for all your hard work. No
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profit, no harvest expenses equivalent
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to the care that you give. Expenses are the costs of running your
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business. Just like water and fertilizer for your
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plants, these are necessary to keep your garden healthy. And you
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don't want to overspend. Cash flow. Just like the weather
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forecast, cash flow is the movement of money in and out
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of your business. Just like you watch the weather, know when to water
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your plants you need to watch. You need to track your cash
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flow to ensure your business has enough money to
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thrive. Assets. It's the tools in your shed.
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Now, assets are the valuable things that your business owns.
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The equipment, the inventory, or even patents.
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These help you to keep your garden that is your business running
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smoothly. Liabilities. Those are the weeds in your
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garden. Now, liabilities will represent what your
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business owes. The loans, your bills. Just like
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weeds, you need to manage them carefully so they
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don't take over. We wouldn't want that, would we? By
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thinking of your business as a garden, financial jargon
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becomes easier to understand. Keep your garden well
