Wednesday, September 16, 2015

Reflections on finance: Basics of finance and Profit& Loss by Ron Gaines

I could not reach BEP until I realized that I could lower the expected wage….  I knew this would be the case; however, I stubbornly thought that I could not change the expected wage.  This is the same mistake a lot of entrepreneurs make.  We typically have unrealistic expectations regarding the amount of money we expect.  We base the amount on what we “think” we should make or we base our expectations on what we perceive to be the salary of most entrepreneurs.  We tend to believe that small business owners make more money than they actually make.  We enter the business with those expectations and we fail.  We do not realize that we should include some of our salary in the startup costs, especially when the amount is required. This also shows me the importance of including your cost of living income in startup costs.  This gives the startup entrepreneur a more realistic picture of costs.

When completing the profit and loss module, I was made aware of the difficulty of predicting expenses for a startup.  Hidden costs do not show up when planning the business.  They typically show up after the planning process and are difficult to notice. This means that hidden costs must be continuously evaluated and revised as you manage your small business. If you do not keep up with hidden costs, your sales predictions can be met or exceeded; however, you profit will not increase and in many cases you would actually lose money.

The technology skills module is difficult to complete because it only allows for one way to complete each tasks.  This is probably the shortest way; however, I am accustomed to “right clicking” to do most tasks.  The module will also “freeze” if you do not hit “Enter” after completing the last task. 


  1. I agree. I had trouble balancing until I lowered the salary. I think this tool is helpful to allow students to see that they aren't going to make a million dollars in the first year and that in order to make money, you have to spend money. This tool also allowed them to think about just how much money they were going to need and explore where those funds were going to come from.

    As for the excel tool, I think the problem you had is a common one for most of these types of software instruction modules. There is always more than one way to skin a cat so to speak.

    I do think that the content was good and the concepts discussed were excellent for a student contemplating starting their own business and many of these concepts can be related to other areas of life as well.

  2. I had the same issue with the tech tool. I went straight to salary, as out of all of the costs that is the one any entrepreneur can actually change on their own. I lowered it got the number under 100 but it would not let me go forward.

    I think this content was a little to basic in how it presented itself. I am not 100% sure that this content was for native English speakers. I am hoping the next series is a little better.