Basic Financial Terms Every Business Owner Should Know

Basic Financial Terms Every Business Owner Should Know

“You keep using that word. I do not think it means what you think it means.” ~ Inigo Montoya, The Princess Bride It’s entirely conceivable that you’ll encounter some utterly mystifying financial jargon when you talk to your bank representative, financial advisor, or accountant. We’re not trying to confuse you on purpose; we use industry-specific words often because they represent specific concepts. Imagine how awkward a conversation would be if we said things like, “Well, your assets that we expect will be turned into cash within a year are high enough that we expect that it won’t be too difficult…
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The Balance Sheet for Therapists

The Balance Sheet for Therapists

We’ve previously covered the Profit & Loss Statement for Therapists, so now it’s time to unpack another important statement: the Balance Sheet. Think of running a business like filling a bathtub (who doesn’t?): the Profit & Loss is focused on how much water is coming in through the tap and how much water is lost to evaporation. On the contrary, the Balance Sheet looks at the amount of water that is currently inside the tub at a particular point in time. That’s as far as we can take the metaphor though, otherwise we’ll start talking about owing bathwater to the…
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The Profit & Loss Statement for Therapists

The Profit & Loss Statement for Therapists

“... a wiser fella than m'self once said, sometimes you eat the bar and sometimes the bar, well, he eats you.”The Stranger from “The Big Lebowski,” (who was actually talking about bears) If you’re not a fan of the cult classic movie The Big Lebowski, the message here is, “You win some, you lose some.” But if you’re wondering how much you’re winning and losing in your therapy practice, it’s time to pull up the Profit & Loss Statement (the “P&L” for short, also known as the Income Statement). Once you understand how to use it, the P&L is likely…
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