What financial concepts should I understand before starting a business?

What would you say are the most important financial concepts one should completely understand before starting their business?

Finance Financial Entrepreneurship

asked Apr 14 '14 at 23:25

Nichole Willhite
7 points

Get up to $750K in working capital to finance your business: Clarify Capital Business Loans

1

Quite honestly, I'm not sure there's anything you'd *need* to know on the financial side, if you've got a cofounder who knows it well. Can we safely assume that you're either talking about a solo founder or generalize it to asking what a founding team needs to know as a whole? – rbwhitaker 10 years ago
Yes, I'm a solo founder! – Nichole Willhite 10 years ago

2 Answers

I'd say that knowledge of break-even analysis would definitely help.

Here's a quick explanation.

If you plan on raising money someday, get an accountant from the get-go. Otherwise, you'll beat yourself for not doing so when the time comes to raise money.

RockHealth has a Startup Accounting 101 post that's also a helpful read.

answered Apr 15 '14 at 17:06

Nishank Khanna
4,265 points

1) Bringing in more money than you spend is generally considered "a good thing".

2) Hire an accountant.

answered Apr 15 '14 at 15:08

Nick Stevens
4,436 points