Being an entrepreneur is easy. What make entrepreneurship hard is because it involves money, either yours or other people’s.
If you play an entrepreneurship game – board game or computer game – you can risk your money rather easily due to the fact that it is ‘replayable’. If you lost, try again, and again.
In real life, the game is not ‘replayable’. Real life is a one way journey (unless you’ve already invented time machine!)
In real life, every money decision involves risks, and minimising the risks, unfortunately, need strong financial intelligence.
One last thing – in real life, minimising the risks through control mechanisms will eventually bring success or failure to you.
Having the right financial knowledge helps you averse risks and avoid bankruptcy.
Having the right financial knowledge keeps your money in sight, and every penny will go into or out from your pocket within your tight supervision… and control.
Where to seek the right financial knowledge
When I mention financial intelligence, I’m not talking about financial intelligence through formal financial education, i.e. in colleges. I’m talking about financial knowledge that is acquired through applied education – seminars, courses, mentorship and, of course, knowledge from getting your own hands dirty.
Formal financial education is important. But in my opinion, informal, applied education is more important.
If you asked me what is my number one source of financial knowledge, my answer would be blog.
Blogs? Yes – blogs are written by guys like you and I. The better bloggers wrote articles based on their experience. Those articles are applied knowledge. Those articles ARE priceless.
From big financial blogs, such as The Motley Fool (Fool.com), to small, independent financial blogs, such as the Stock Market Blog (StockMarketBlog.com,) you can learn many things about money, ranging from personal finance to stock market investing.
Sadly, many entrepreneurs lack financial knowledge
It is unfortunate to learn that my fellow entrepreneurs lack financial knowledge. I’m not talking about advance knowledge. I’m talking about simple, basic, knowledge.
Understanding your balance sheets and financial statements are essential to run your business. Trusting them to your staffs is nice, but understand them yourself help you control risks, while giving you better view on your business.
When hard times hit, such as today’s recession, the financial knowledge is the one that make or break your business. Unfortunately, entrepreneurs often forget about this and realise the importance of financial knowledge when it’s all too late. I have to admit, this is my case, too.
I have to close my businesses due to lack of financial knowledge, and I promise that I will not let my business slips past me anymore.
I’ve been near bankruptcy myself and survive. I hope you survive, too, even thrive! It’s never too late – learn as much as you can about finance. You’ll see that, eventually, what you know will save you from financial adversity.
Ivan Widjaya
Finance is a lifelong education
Image by pingu1963.