Wednesday, 9 December 2015
The prudent mind
In order to be successful financially, you have to be prudent. One of the principles in accounting is to not overestimate your assets and revenues as well as not underestimating your liabilities and expenses. That way you can thrive well financially as it will prevent you from spending more than you can afford to. This should be applied in businesses as well, it will help owners to know the true position of the company, thus promoting growth as well as preventing debt problems.
A prudent mind would avoid potential business problems. Thus, if you see a major red flag when you are about to enter a business. Do not enter the business deal, thinking you will deal with the problem when it occurs. You will end up with losses and probably even debts. Some individuals will say they saw the red flag but they ignored it, do not ignore it. In other words if their is a huge risk the problem will occur and the impact will be high on the business, avoid the risk. Thus, reject the business deal.
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