Liabilities are all debts that you have. In a sole proprietorship you business liabilities should also be included; make a separate list for each. Just as we divided assets into tangible and intangible, we do the same thing with liabilities.
Tangible Liabilities include debts such as mortgages, credit cards, auto loans, personal loans, business loans, lines of credit, and all other monies owed.
Intangible liabilities ( invisible liabilities) may not be secured debts, or even spelled out. They may be a dream vacation promised for an anniversary. They may be college education for the kids or grandchildren. By making a list of all these items and including them in you total liabilities column, you can put your true financial position in perspective.
The rest is easy, you subtract your liabilities from your assets and then you develop your business plan.
In the first few years of a business this exercise should be done every month.
As basic as these two blogs have been, ask yourself, do you have that information up to date? Business is a numbers game and these two items form the base for our future growth.
This month I am encouraging you to purchase “The Be Prepared Book” which contains forms and an interactive CD to compile all the information needed to complete the foundation for your business and life. Go to www.paydirtbooks.com to order your own book for only $35 and receive “How to Build a Business Support Group” at no charge.
If it sounds like a lot of work, then it needs to be done.
Have a great day!