A recent study conducted by Dunn & Bradstreet found that 90% of all business failures can be traced to poor management resulting from lack of knowledge … the inability of management to critically think about their business.

Critical thinking isn’t an abstract, transferable skill…it’s “domain specific”. In other words, critical thinking is intimately tied to knowledge of the subject. First, you must possess information to think about it & the way you think about information in one field (like business) is almost entirely different from how you think about it in another field (like chemistry). To avoid these common traps and mistakes, it is absolutely imperative that you acquire business knowledge and apply it.

Critically thinking about your business requires knowledge in four key business areas: planning; accounting; marketing/sales; and Human Resources … I challenge you to take the quiz and let me know how you do!

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Sample “Thoughts Library” Posts

Thoughts About The Income Statement

Of the three main financial statements, the income statement generally has the greatest bearing on a manager’s job. That’s because most managers are responsible in some way for one or more of its elements: Generating revenue. In one sense, nearly everyone in a company helps generate revenue…the people who design and produce the goods or deliver the service, those who deal directly with customers. But it’s the primary responsibility of the sales and marketing departments. If same-store or same-product revenues rise faster than the competition’s, you can reasonably assume that the folks in sales and marketing are doing a good…

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Thoughts About The Balance Sheet

It is important to understand how to use balance sheet ratios in managing your own business area. Let’s start by looking at a couple of ways in which balance sheet figures indicate how efficiently a company is operating. Working capital. Subtracting current liabilities from current assets gives you the company’s net working capital, or the amount of money tied up in current operations. Financial managers give substantial attention to the level of working capital, which typically expands and contracts with the level of sales. Too little working capital can put a company in a bad position…it may be unable to…

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This Month’s Featured Free Video

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The Financials – Managing Your Business Session 3: Science & Art

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