Why It’s Important to Know About Business Finance When Starting a Business
Business finance is incredibly important for anyone who is starting a business, and it is a body of knowledge that you should have in order to be successful. While a business can eventually have an accounting department that may handle the everyday tasks in this area, every entrepreneur should have a handle on this topic. It is not an exaggeration to say that the success of your business depends on it.
Every business goes through a stage in the beginning where the corporate infrastructure has yet to be built out, and the business is primarily focused on getting its feet under it. It takes some time for the support functions to be filled in, and it takes revenue for a business to be in a position to hire people for non-revenue-generating positions. In other words, there must be a critical mass of earnings before it makes sense for a company to hire for the functions that are the backbone of a business.
In the meantime, the entrepreneur who founded the business will need to perform many of these tasks on their own until they have the money to hire for non-revenue-producing positions. They will have to be a jack-of-all-trades and an expert in everything during the early stages of their business life. As they start to fill in these areas of their business, the entrepreneur will have to be intimately involved in hiring and planning. While some outside expertise can be marshaled, the entrepreneur cannot be hands off in setting up the structure. Furthermore, accounting is one area of the business where you cannot be hands off and fully trust the domain to other people.
When the company is up and running, you will still have to be fully engaged in the business’s finance function as the entrepreneur. Business finance involves the collection of your revenue and the outlay of expenses, so there will need to be a close degree of supervision. The entrepreneur will need to be familiar with where every dollar is coming from and going out in order to know the business. You will also need to keep a close eye on your expenses, but in order to do so, you will need to be proficient on the system that tracks where the outlays are going.
This all fits into the notion that business finance will help you predict the future of your company. When you can track the revenue and observe the business trends, you can see what direction your business is following and where the potential for growth is. To do so, you first need the expertise to track business receipts. Not only do you need to know what technology should be used, but you also need to build the expertise necessary to figure out how to utilize it.
Learning Finance Tips from the Best Business Finance Resources
When entrepreneurs are starting out, they do not necessarily have to learn everything from scratch. There are many resources that are available to you. By becoming literate in business finance using some of these resources, you can learn what you need to know in order to get your business started. Here are a few that can help you get up to speed.
Naturally we’d be remiss to not mention ourselves on this list, but we’ll keep it short. We consistently add new content to our Business Finance Section to help you continue to learn everything you need to know to keep your startup finances humming and your cash flowing
Here are some other fantastic resources to continue learning:
If you’re looking to learn the principles of accounting, this is a great website to help get you started. There are various tutorials in the principles of accounting that can teach you the basics and give you an idea of what you need to know. You can also take tests on the material after the lessons. There are tutorials that are part of a more advanced version of the program. This is practically an entire accounting textbook available online.
You can take an entire course in business finance without even having to pay a penny in tuition or fees. There are lecture notes and course materials that can teach you accounting like any other college student. The courses that are offered are the same ones that are taught to some of the country’s top business students. What is even better is that you have continuous access to these courses online so that you can take them at your own convenience and go back for reference.
There are several helpful online magazines that publish accounting articles. These publications have entries about both the how’s of accounting as well as the infrastructure that is necessary to have an effective business. One example of a helpful online publication is Entrepreneur.com. This site has educational material, and some of it focuses on business finance. Other vital resources that can teach you about business finance are Forbes.com and The Balance Small Business.
“Financial Intelligence for Entrepreneurs” takes the vast universe of finance and boils it down to a digestible 300 pages. The book effectively explains to entrepreneurs what the numbers that they see on paper truly mean. It takes complex nuanced principles of accounting and covers them in an easy-to-understand methodical manner. This book is a great introduction for those entrepreneurs who start without a business background. When you are done with this book, you will have a solid grasp of balance sheets and cash flow statements. Practically an entire introductory course on accounting is covered in a few hundred pages.
When businesses first start running, it’s important that entrepreneurs understand where all the money is going. Having an understanding of how finance and accounting work is vital to your business’s success. As a new business owner, there are plenty of resources available to you. You can learn business finance on your own without having to get a degree or invest in a full accounting education.
Subscribe and Stay Updated
Get all our posts, blogs and video content via e-mail.
We promise. No spam.