Number crunching isn't only for chartered accountants, accountants or tax men. Many industry professionals need a basic understanding of math and so do entrepreneurs!
More than just creating the ideal product, knowing math is essential to carry out important calculations and to make estimates. Knowing basics such as Bracket Of Division, Multiplication, Addition, Subtraction (BODMAS) helps you know whether you are taking the right decisions for your business.
It is never too late learn. Even though you may hire a trustworthy accountant who does the necessary calculations for you, knowing the details yourself is definitely a plus!
Determining the right price for your products: In order to sustain a business, an entrepreneur needs to maintain a good cash flow. And to do this one must have the apt selling price for a product. Markup is the amount added to the cost price of goods to cover overheads and profit. If your operations require a large markup, such as 80%, you may not be competitive in your industry, especially if other companies sell the same products for less. Hence, you need to calculate a markup that will be profitable for your organization.
Managing costs: For any aspiring entrepreneur, knowing the cost of a business is a must. Before you formally establish your business, you must estimate the cost to manufacture your product or perform your service. Add the amount you need to shell to create you product. Calculate each cost and draw a conclusion whether this business is feasible or not. For every entrepreneur it is very important to understand and manage costing.
Speculate: This is undoubtedly the most important trait for an entrepreneur. Entrepreneurs need to keep speculating the after effects of decisions they take. You need to analyse and foresee whether the decision you make is going to work in your stride or no. There are many decisions that have mathematical associations. When you decide to hire an employee, understand the salary structure of that employee and see if you can bore the costs (keeping your profit in mind). If any of your competitor comes up with a new strategy, decide how you can tackle it by not affecting the profitability of your organisation. Use of basic math is applicable to every example I gave. Hence, you certainly need to do some calculations to understand your business.
Number crunching is fun and beneficial. Do not neglect it, knowing the basics will help you keep a check on your money. Work on these skills and be confident about the math you learn.