Sharing Insights from Guest Speaker - Julie Wong

Empowering female entrepreneurs is at the heart of our weekly sessions, and our latest forum was no exception. We had the privilege of guest speaker Julie Wong who has been a regular guest at our #Founder2Leader weekly sessions for #female founders. In her talk this week, Julie illuminated crucial financial concepts that every business owner should grasp.

The Importance of Documentation

A significant portion of the session was devoted to financial documentation. Julie stressed the necessity of maintaining a balance sheet and a profit and loss statement to measure business health, alongside the often-underestimated cash flow forecast. Despite her reservations about the utility of a cash flow statement, she highlighted that a cash flow forecast is indispensable for financial planning, recommending a twelve-month horizon updated on a monthly basis.

Understanding the financial backbone of your business is crucial. Julie delved into financial management by explaining revenue, costs, profit, and breaking even. She differentiated between cost of sales and overheads, clarifying that operating profit is what’s subject to taxation—a fundamental insight for strategic decision-making. Notably, understanding contribution, or gross profit per unit, helps determine the sales volume needed to cover overheads.

Eliminate the Fear by taking regular actions

Julie also touched upon the importance of managing working capital—the lifeblood of any business. She emphasised the need to efficiently handle periodic payments, debtors, and creditors, to ensure the business remains solvent and relationships stay amicable. She illustrated this with a compelling story of a business owner preemptively selling equipment to bridge a cash gap, showcasing forward-thinking financial planning.

Year-end financial statements were likened to a sandwich, where the balance sheet and profit and loss are the bread. This analogy vividly illustrated how essential these documents are to understanding your financial position. Julie further likened cash flow to oxygen, stressing that even profitable businesses can face bankruptcy if they run out of cash.

Throughout the talk, she encouraged entrepreneurs to overcome their finance fears, underscoring the necessity of clarity in decision-making and understanding competitors.

As we gear up for our next session on networking, we ask:

?How do you currently manage your business finances?

? What challenges have you faced in this area?

? How could strategic financial planning transform your business trajectory?

If you are a #femalefounder, join us next week to continue this empowering journey. Register today and take proactive steps toward your journey from #Founder2Leader