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Technology and financial literacy crucial to Canadian SMBs, says Intuit study

Technology and financial literacy crucial to Canadian SMBs, says Intuit study 

It shows that Canadian entrepreneurs do not have an accurate assessment of the value of their goods and services; they need to increase their financial literacy skills; and the proper use of technology can yield positive results. Rob King, director, small business, Intuit Canada, shared his insight on the study.

King addressed one of the most troubling study findings: Canadian entrepreneurs do not know their own worth. “When we look at our survey, knowing your worth is really about a small business’ profitability – the value or their time and their products’ customer benefit, vs. the cost of operating their business,” he commented. “The only way for a small business owner to effectively manage this is to understand their business’ back-end finances with a view into their critical business data. To determine what they should be charging, business owners need to understand their product’s or service’s benefit, and weigh that against their competitors, and finally understand how much their customers are willing to spend – within their market. Bottom line, pricing should be in line with the value a business brings to its customers, while taking into consideration the competitive landscape.”

A large part of understanding a company’s worth comes from strong financial literacy skills. “Small business owners need a foundational education on financial fundamentals, must have the right tools and of course the right advisors to guide them and provide sound financial analysis,” King asserted. He pointed out three steps entrepreneurs must take in order to improve their financial literacy.

“No matter where small business owners are on their journey, entrepreneurs need to educate themselves on the numbers that matter to their business,” he said. “Financial management software allows entrepreneurs to assess their businesses’ worth, strengths, and weaknesses, which help business owners identify opportunities for future growth to reach that critical five-year milestone. Professionals like accountants and bookkeepers will use the data from the tools, analyze it, make sense of it and provide a personalized overview of your business and its needs.”

“Small business owners can also tap into the Canadian startup ecosystem for credible guidance,” King added. “StartUp Canada, Communitech and Futurpreneur offer a variety of services and resources for entrepreneurs.”

Technology plays a large role in financial literacy. However, there can be obstacles on the path to embracing these solutions. “The greatest barriers are usually cost and a lack of understanding of how to use the technology,” King remarked. “It is difficult to decide to invest in something if you unsure of how to use it or how it will impact your business.”

The consequences of not possessing strong financial literacy skills are dire, warned King. “As a result, business owners are missing out on tools that can make their business more time and cost-efficient and dramatically improve their cashflow and accounting processes,” he concluded.

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