3 minutes read
One of the most dangerous weaknesses in a young founder is not knowing the financial condition of his own business.
Most founders understand sales. Fewer understand profit. Very few can open their Profit & Loss, Balance Sheet, and Cash Flow Statement and understand what the numbers are telling them.
Revenue can create an illusion. You can be selling more every month while the business underneath is becoming weaker.
Every founder should track these seven numbers.
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1. Cash
How much cash does the business actually have today?
Revenue and profit do not guarantee that you have enough cash to pay your obligations.
2. Net Profit Margin
For every $100 in revenue, how much remains after expenses?
More importantly, is that margin improving or declining?
3. Debt
How much does the business owe, and when must it be repaid?
Debt can quickly become a burden if a founder does not understand its size and repayment schedule.
4. Accounts Receiveable
How much money have customers promised to pay but have not paid yet?
A sale recorded on paper does not pay your bills. Cash collected does.
5. Accounts Payable
How much does the business owe its suppliers and other vendors, and when are those payments due?
Knowing your obligations is part of responsible financial management.
6.Operating Cash Flow
Is the business actually generating cash from its operations?
Or is it surviving through new investment, borrowing, or delaying payments?
Are sales growing, stagnating, or declining?
Growth does not automatically mean a healthy business, but understanding the direction of revenue is essential.
A Muslim founder should understand the financial amanah Allah سبحانه وتعالى has placed under his responsibility.
You do not need to become an accountant.
But you should know where the money is, where it is going, what is owed, and whether the business is becoming stronger or weaker.
You cannot responsibly manage what you refuse to measure.
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Everything you need to build your business the Muslim way - from idea to institution.
