INTRODUCTION
Many small businesses do not survive to see their third birthday. This is a
sad but true fact. One of the main reasons this happens is that people who
set up their own business lack the necessary skills needed to successfully
run a business. Often they are very skilled at what they do for a living – for
example, a wedding photographer may be highly skilled at photography.
However, being skilled at what you do is only part of the story. You
need to add more skills to your skill set if your business is to reach
its full potential: skills such as marketing, human resources management,
fi nance, strategic planning and, hence this guide, accounting.
Setting up and running your own business can be a daunting prospect,
but it can also bring great personal satisfaction, independence, freedom
to be your own boss, fl exibility to manage the business around your
lifestyle and, hopefully, fi nancial reward. Talk to any person running their
own business and you fi nd that some, if not all, of these factors motivated
them to leave the security of a paid position with an employer and set out
on the journey of establishing a successful small business.
This Guide seeks to provide some practical help along that journey by
setting out some basic steps in accounting which, if followed, will help
provide a fi rm foundation for a successful small business.
Setting up your own business involves taking an idea and
developing it into a viable concern. It requires courage, vision,
energy, enthusiasm and focus. It also takes the courage to admit that
you don’t know everything and need to learn from others. Think of
setting up a business as being like a jigsaw puzzle. If one or two parts
are missing then the picture is not complete.
This Guide is designed to provide practical, easy-to-understand help
to those thinking of setting up their own business, or already running a
business, in areas such as legal issues, marketing and business planning.
The aim of this Guide is to help you acquire some basic accounting
skills from a business perspective. For example:
why you need accounts
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what accounts are
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how you put together and manage the accounts
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the importance of cash fl ow
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how to forecast the profi t and cash fl ow of your business.
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vi6 Blake’s GO GUIDES
Accounting DiZign.indd 6 15/2/06 9:51:17 AM
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