Financial literacy is essential for business partners

In 2011, Mitch Bowler and Nigel Fish co-founded Kamisand Media Group. Based out of Vancouver, British Columbia, they focus on web development for small and medium businesses, as well as acquiring web-based businesses and re-developing those assets for resale. When asked about financial literacy, they had the following advice for other entrepreneurs:

• Financial literacy is key to success. Mitch and Nigel had a tonne of questions regarding taxes, invoicing, bookkeeping, taking deposits and so on, that they didn’t want to just hand off to an accountant. They wanted to understand the work to keep costs down in the future. They found an accountant who understood where they were coming from and, “She has been amazing at helping us through a variety of issues. We’ve learned a lot about the basic accounting necessary for our business that saves significant costs,” explained Nigel.

• Disclosing personal finances. Since they’re in a partnership, it has been important to determine what is the absolute minimum level of revenue needed to be able to eat and survive, so that they can sustain themselves without being stressed – as this can have a dramatic effect on the operation of their business, or even worse, can instill serious doubts. Knowing the personal budget of both partners allows you to better plan the necessary cash flow and budget, and avoids a potential major falling out.

• Managing business finances. It’s important to select a tool that enables both partners to be aware of the financial operations of the business with ease (Nigel and Mitch use Xero). It’s also crucial that both partners review the books together to determine issues, cost savings, or revenue opportunities that the other might not be aware of, and to do these reviews often.