Business Posts

3 Essential Financial Reports Small Business Owners Should Understand

Successful business owners use their financial statements to guide the management of their business. These statements show the flow of money into and out of the business, provide a snapshot of the business’s financial health, and guide the identification of trends within the operating activities. Without understanding them, it’s impossible for business owners to know if they are earning a profit or have the funds to keep up with their business expenses, as well as to plan for any future growth or opportunity.

No matter how big or small a business is, whether bookkeeping is done in-house or by an outside accountant, all entrepreneurs should be able to read and understand three main financial reports. Each one of these statements serves a different purpose, but taken together, they provide a clear view into a company’s operating activities.

  1. Balance Sheet

    The balance sheet is a snapshot of the financial position of the company at a given point in time. This includes assets (what the business owns), liabilities (what the business owes), and owner’s equity (the owner’s stake in the business). The balance sheet reveals the current status of the business as of that date. While a single balance sheet won’t necessarily aid in the discovery of trends, comparing balance sheets from equal points in time (eg, quarter to quarter or year to year) can show how the business is faring.

  2. Income Statement

    The income statement is the best view into a business’s bottom line, or net income, which is why it’s typically used to show lenders and investors whether the company has made or lost money during a given period. Income statements are also beneficial for the business owner because they show whether the company is generating a profit.

  3. Cash Flow Statement

    The cash flow statement shows each of the company’s incoming and outgoing transactions over a period of time to provide a picture of exactly what happened to the company’s cash during that period. It provides an overview of what cash has been going in and out of the business that didn’t make it to the income statement. This statement shows potential stakeholders how well a business manages its cash flow and pays off its debt obligations. A periodic cash flow statement also helps a business anticipate borrowing needs.

Together, these three financial statements provide a view of how money flows in and out of the business and the context needed to ask the right questions. Understanding them is an important step in becoming a smarter, more data-driven business owner.

To learn more about using your company’s financial statements to identify relevant and significant financial measures requiring management action, consider registering for our upcoming workshop on Reading & Understanding Your Financial Statements or scheduling a one-on-one appointment with a business librarian or NaperLaunch coach.

Monday, November 29, 2021 - 12:30

Market Research Tips for Startups

Market research is an essential step for any new startup. Identifying and understanding your customers and competitors will help you to determine your competitive advantage and help your business stand out.

In this blog post, we will discuss strategies for researching your customers and competitors using resources offered by the Naperville Public Library. These resources can be accessed by visiting one of the library’s three locations or from the NPL website with your library card number and PIN.

Customer Segments

It’s important to understand your customer base before you start up. To help you better understand opportunities and limitations for gaining customers, use library resources such as Reference Solutions and Gale Business: DemographicsNow to locate demographic data for your target market, including age, interests, income, and spending habits. In addition, interviewing potential customers is crucial for understanding the needs and pain points of your target market; this blog post includes some best practices.

In order to get a good sense of your market, the Small Business Administration suggests using the information you gather to answer the following questions:

  • Is there a desire for your product or service?
  • How many people would be interested in your offering?
  • What is the income range and employment rate?
  • Where do your customers live and where can your business reach?
  • How many similar options are already available to consumers?
  • What do potential customers pay for these alternatives?


In addition to understanding your customers, it’s important to know what your competitors are doing. Use library resources such as Reference Solutions, Gale Business Insights: Global, and Market Share Reporter (available via the Gale Directory Library database) to identify your competitors and learn about the market landscape. According to the SBA, your competitive analysis should assess the following characteristics:

  • Market share
  • Strengths and weaknesses
  • Your window of opportunity to enter the market
  • The importance of your target market to your competitors
  • Any barriers that may hinder you as you enter the market
  • Indirect or secondary competitors who may impact your success

For more information about this and other topics, consider registering for the NaperLaunch Academy workshop series or scheduling a one-on-one appointment with a business librarian or NaperLaunch coach.

Wednesday, November 10, 2021 - 09:00

Small Business Benefits of Joining Trade Associations

Joining trade associations can be an effective way for small businesses to increase their contacts and find potential customers, no matter what industry they operate in.

A trade association is an organization founded and operated by businesses in a specific field. Trade organizations often promote collaborative opportunities between companies and facilitate professional development opportunities for their members. In addition, they often publish materials for their members, including newsletters and magazines, directories, and professional resources.

They also may sponsor trade shows or conferences that bring together key players within a given industry to collaborate and learn, capture new customers, and view what’s upcoming and trending. These events often include workshops, breakout sessions, speaker presentations, targeted exhibition events, press and media opportunities, and networking events, as well as the exhibition floor, where companies can buy booth space to meet customers and promote their products and services.

Trade associations can help open the door to opportunities for small business owners through the people they meet—for example, they might develop stronger vendor relationships through their membership, or get the opportunity to work with other members on a collaborative project that increases their industry reach (and drives growth for their business as a result).

To help small business owners identify relevant trade associations and affinity groups, Naperville Public Library offers several resources that can be accessed within the library, as well as from home with a NPL card number and PIN.

  • Gale Directory Library includes information on more than 600,000 international and U.S. national, regional, state, and local nonprofit membership organizations. Results can be filtered by criteria including the types of publications produced by the organizations.
  • Gale Business Insights Global contains a wealth of industry information, including trade associations. This database can be searched by NAICS or SIC code as well as keyword.

Other useful resources that can be found online include:

  • Tradeshow Network Marketing Group offers an online calendar that lists upcoming trade shows from a variety of industries, along with locations and expected numbers of attendees and exhibitors.
  • Marketing Mentor maintains a list of links to major U.S. trade associations by industry.

For more information about this and other topics, consider registering for the NaperLaunch Academy workshop series or scheduling a one-on-one appointment with a business librarian or NaperLaunch coach.

Tuesday, November 2, 2021 - 14:15