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Funding & Financials

August 8, 2011

Accounting Is Key To Small Business Success

When the stock market dropped 500+ points last week, it didn’t matter if you had money in it or not to make you start worrying about what our economic future holds.   For that reason, I want to spend some time this week talking about what current food entrepreneurs and aspiring food entrepreneurs can do to best position themselves to survive whatever tomorrow brings.   Check back tomorrow for a post about whether now is the right time to start a small business and Wednesday, Thursday, and Friday of this week I’m working on posts about what small businesses can do now to prepare themselves in these uncertain and shaky times.

But first I wanted to start with a little refresher course in Cost Accounting.  I would be lying if I said that I’m an Accounting wiz.  Infact,when I was in business school I struggled to get through the mandatory accounting class that’s required of all students and, walking out of the final bruised and beaten, I swore that I would never again take another accounting class.   My husband, horrified by the prospect that someone could earn an MBA with only one accounting class under their belt, more or less shamed me into taking a Cost Accounting class saying that it was the basis of small business ownership.  I don’t know whether it really was the prospect that Cost Accounting would be so important to the business plan I was working on or simply the fear that for the rest of our lives together he would always argue that his business school was better than mine (business school competition is fierce – even within the same household!) so I grudgingly signed up for the class.   This is where I will publically declare that my husband was correct.  Cost Accounting really is business accounting and it has been critical in every step of my own small business.  

The New York Times has a wonderful article in their Small Business Section about several key aspects of Cost Accounting that every small business owner should know.   Take a moment to read it (don’t think I didn’t hear that groan that just escaped you!) because it just may mean the difference between success and failure.   Just like my husband said – you’ll thank me later!

7 comments on “Accounting Is Key To Small Business Success

  • Your Back Office on said:

    Glad to see you made this post on accounting. Too often, it’s a part of a running a business that gets little mention — or it’s not even understood. Accounting isn’t that difficult. It requires consistency.

    • smallfoodbiz on said:

      I’m hoping to do more posts this year on the financial and accounting side of running a small business. It’s a critical componant to any successful business so you either need to be willing to tackle it yourself or hire someone you trust to help you with it.

      • janetdriscoll on said:

        Cost Accounting can be very difficult for people to understand. That class was one of my biggest challenges when studying for a BA in Accounting. Now that I understand it well, I actually enjoy performing cost studies for people, especially those in the food industry.

  • ribamaoriba on said:

    Thank you for remembering the issue of accounting.
    I had 2 courses of accounting at the university, but that was long ago. I want to start a my activity and need to update my knowledge on accounting.
    What course can you recommend me?
    Thank you, Barbara

    • smallfoodbiz on said:

      Barbara,

      If you’re in the US, a local community college is usually a great resource as they oftentimes have noncredit classes focused on small business accounting. You could also check out your local small business administration office (http://www.sba.gov/) as they typically offer courses for little or no fee on a variety of small business subjects. Hope that helps!

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