Accounting Solver

ACCOUNTING FOR CONTROLLABLE & UNCONTROLLABEL FACTORS IN HOME BUSINESSES

by ren on March 15th, 2008

Mary Emma Allen asks in her recent post: http://www.homebiznotes.com/which-candidate-will-help-or-hinder-your-home-business/ and Miki Saxon of Leadership Turn comments: “Whether local or Presidential, I’ve gotten to the point that where I believe candidates only stand by what they say as long as it’s expedient. When it’s not, they’ll flop to whatever position gets them reelected.”

While it is good business practice (especially for home businesses) to do a business or economic environment scan (including how candidates will affect business and the economy), at the end of the day the business owner or manager should focus on what is controllable and uncontrollable in his / her business planning.

The Business Plan is built on the controllable factors (production schedule, inventory level, expenses, working capital, accounts receivable and payable, cash reserves, etc) and provides for the uncontrollable by making sure that the business is on solid footing with regard to its fundamentals (equity, quality control, customer service, market coverage, etc), so that whichever way the economy and the market turn because of political shenanigans, the business remains viable and profitable.

What politicians promise and actually do are uncontrollable and are in the same order as the weakening dollar, the subprime tsunami, and the Iraq war eating into the nation’s resources. The other effective way of handling the uncontrollable is to pray.

Images from Microsoft Clipart

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POSTED IN: Accounting Concepts, Accounting for NonAccountants, Best Business Practices, Equity / Capital, Personal / Household Finance, Random Thoughts on Accounting, Small Business Finance, Success Accounting