There are a lot of skills you need to learn when starting up a business. Financial skills can be particularly handy. These include skills like budgeting, accounting, forecasting, negotiation and pricing. Below is more information as to what each of these skills requires. 

Budgeting

Keeping within a budget is essential when running a business in order to prevent you sinking into debt. This involves keeping track of your expenses and being able to accurately predict your income from month to month so that you know exactly how much you can spend. Budgeting can also help when setting aside savings. You can use software to help you create monthly budgets. 

Accounting

Accounting is centred around calculating and reducing tax. It is an essential skill required for filing your tax returns accurately and on time. Doing your own accounting requires a degree of business tax literacy such as understanding what VAT is and knowing what a payments on account self assessment is. Some business owners prefer to hire an accountant to take care of expense tracking and tax calculations, however basic tax knowledge as a business owner is still necessary. 

Forecasting

Financial forecasting is a method of predicting your company’s future financial situation by analysing historical sales data and keeping abreast of current customer trends. It is important for planning growth, seeking funding and making long-term investments - without having some idea as to where your business will be in a few months time, you cannot make long-term decisions. Accounting software can help when forecasting by helping to put data into easily interpretable graphs. Good forecasting also requires having clear goals so that you know exactly what information to look for. 

Negotiation

Knowing how to negotiate is another key financial skill to learn as a business owner. It can help you to spend less when ordering supplies and outsourcing services, and it can help you to earn more when haggling with customers. While good negotiation requires getting your figures right, it also involves personal skills like active listening and emotional intelligence - how you communicate can be just as effective as what you communicate when trying to get the best deal. There are courses that you can take in negotiation to become a better negotiator. 

Pricing

Another underrated skill is knowing how to price your products and services. If you set the price too high, you may find it hard to secure customers. If you set your prices too low, you could struggle to make a profit. Individual products and services will need to be priced differently. Learning a few pricing strategies like tiered pricing, price skimming, loyalty programs, bulk discounts and seasonal discounts could help you to set attractive prices that lead to greater revenue, while still making a profit. This post offers some more information on pricing strategies.

Final Word

Learning these skills will help you to run a successful business. There are many ways in which you can learn these skills including taking courses, hiring advisors, reading books/blogs and familiarising yourself with financial technology.