Coco Chanel, the famed fashion designer, was once quoted as saying: “There are people who have money, and there are people who are rich.”
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While many interpretations of this quote exist, one that is particularly pertinent is that while money may come into ones hands, those who do not understand how to control it, will never grow rich. This especially true of the small business owner who is not financially literate.
Many micro and small businesses do not make it beyond the first or second year and even less reach the 5-year mark in operation. The many factors that contribute to the high failure rate is the subject of a lot of research. However, one of the factors that we easily overlook is the financial illiteracy of many smaller business owners. That coupled with the poor numeracy dooms most businesses failure from the resultant poor personal and business financial practices.
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