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Can you recommend a good finance book for entrepreneurs with no finance background?

Tony Ahn's Profile

I just pulled in enough angel investment to rent an office and hire six employees, and I've got business lined up waiting for me to open my doors. I know how to read a P & L and a balance sheet, but that's where my knowledge of finance stops. I'd love to read a book that is written for my level of knowledge and brings me up to speed on what I need to know to run my company. There's only a few of us, but we're doing low 6-figure deals out of the gate, so I don't have much margin for error.

Answers

Topic Expert
Cindy Kraft
Title: CFO Coach
Company: Executive Essentials
(CFO Coach, Executive Essentials) |

Definitely!

Ken Kaufman's "Impact Your Business" is an excellent resource.

All the best, Tony.

Robert Foley
Title: Consultant
Company: Robert Foley & Associates
(Consultant, Robert Foley & Associates) |

Is your focus business accounting or general business management or pricing your services or product or starting a business? Robert

Tony Ahn
Title: Chief Digital Architect
Company: Tony Ahn & Co.
(Chief Digital Architect, Tony Ahn & Co.) |

I'm running a hybrid digital marketing/traditional PR firm, and we're not yet big enough for a full-time CEO, so I need "finance for entrepreneurs" or "finance for managers."

Danielle DehmlerBuckley
Title: VP Finance
Company: BlogFrog, Inc.
(VP Finance, BlogFrog, Inc.) |

Start with Fred Wilson's MBA series. It's concise and tells you what investors care about as well. http://www.avc.com/a_vc/2010/03/the-profit-and-loss-statement.html

David Collins
Title: CEO
Company: Glentyde Capital Advisors
(CEO, Glentyde Capital Advisors) |

Since you mentioned finance in particular, Shim and Siegel's Financial Management might be a good fit for your needs.
http://www.amazon.com/Financial-Management-Joel-G-Siegel/dp/0764114026
Use Amazon's Look Inside feature to get a quick feel. Some of the chapters will probably be non-applicable, but the others will serve as a desktop reference for a variety of fin mgmt topics, each presented at a very fundamental level.
The preface is unfortunately omitted from the sneak peak feature, but it opens with the statement, "This book is written for the businessperson who must have a basic knowledge of finance to do his or her job." (3rd ed.)

Congrats on the early success!

Steve Player
Title: Program Director
Company: Beyond Budgeting Round Table
(Program Director, Beyond Budgeting Round Table) |

I recommend you read “Simple Numbers, Straight Talk, Big Profits” written by Greg Campbell who is an Alabama based CPA that focuses on small businesses. I found his book in an airport bookstore and picked it up because its last chapter is titled “Skip the Budget, Learn to Forecast.”

Reading it provides a lot of useful information about how small business owners should think about their business. The first chapter called “Owner’s Salary: Why Your Salary and Distributions Are Fogging Your View of Net Income” is very insightful. It details how many small businesses regularly under pay (or over pay) the owners because they never separate the amount of compensation that should be paid for doing various tasks in the business (that owners often have to do) from the return that is due to owning the business.

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

Skip the book. Hire a financial expert. Finance is a specialty. There are many books out there, but they discuss topics in controlled settings. A finance expert will have the knowledge in multiple areas that will provide solutions in getting you through the bumps.

As an example -- Home Depot has these great step by step books on building and repair. After a quick glance you say, "Easy. Why should I pay someone?" You get the supplies, you buy the tools and you are ready to go. You get into the project and are immediately faced with unanticipated challenges - 'This doesn't look like the picture; the supplies I purchased are the wrong size for my situation; there is rust all over what I am trying to replace..." After spending more time and money than first expected you complete the job.

A book will give you the knowledge, but experience will get you where you want to go faster.

Linh Nguyen
Title: CFO
Company: International Stem Cell Corporation
(CFO, International Stem Cell Corporation) |

Financial Intelligence" by Karen Berman and Joe Knight is a good reference! All the best to you!

Linh

Topic Expert
Dana Price
Title: Vice President, M&A
Company: McGraw Hill Education
(Vice President, M&A, McGraw Hill Education) |

Agree with Regis. First off, if you already have an Angel investment with no finance person, how do you even know how to record the investment? Secondly, you might be better served letting another expert handle that while you focus on selling your products and running the business, no?

Donald Koscheka
Title: Principal
Company: Bluecloud Communications
(Principal, Bluecloud Communications) |

Tony:

We are also a start-up in a similar position. Since you may not be in a position to afford a professional, you might want to go back to your angel and ask if they have someone you can work with - they may have an accounting firm that they use that they would be willing to get involved. Short of that, reach out to your local chamber of commerce to see if there are any organizations in your area that provide mentoring for start-ups. Some organizations will work pro-bono. Eventually you will need professional help - I have hired an accounting firm to help us - it's expensive but we're not only get accounting help but the advice of a senior partner who has taken an interest in our firm.

BtW, a great primer is the "3 Day MBA" - after reading it (several years ago), I decided to go and get an MBA - big leap for a software developer but it definitely helped me understand the intricacies of starting my own business.

Topic Expert
Doug Thompson
Title: Director of Revenue
Company: Castlight Health
(Director of Revenue, Castlight Health) |

Check out Cash Flow Problem Solver by Bryan Milling. Perfect for small business. Helps you understand how accounts receivable and inventory are investments that require funding, the impact on the whole cash flow cycle from suppliers to customers, as well as the interrelation of balance sheet, income statement and cash flows. It explains a lot of concepts that at first are counter-intuitive, but are crucial to cash flow management, such as how growing your business profitably can cause serious cash flow problems. It may save your business some day.

Jorge Marquez
Title: Consultant
Company: ITCF LLC
(Consultant, ITCF LLC) |

Tony:

Try "Proven Techniques For Getting Positive Cash Flow from Your Business: A guide for those who are serious about understanding and improving their company's performance...but don't know where to begin." If you send me your email I will send you a digitial copy.

jorgemarquezaatyahoo [dot] com

Bob Low
Title: Principal
Company: Perron & Low
(Principal, Perron & Low) |

I've published a book, "Accounting and Finance for Small Business Made Easy", focused on day-to-day financial management and written for non-financial managers. If interested, you can check it out on Amazon at http://www.amazon.com/gp/product/1932531173/qid=1104184998/sr=1-1/ref=sr_1_1/104-1748155-7920716?s=books&v=glance&n=283155

W. Michael Hsu
Title: Founder & CEO
Company: DeepSky | Entrepreneur's Accounting Depa..
(Founder & CEO, DeepSky | Entrepreneur's Accounting Department) |

Tony,

More entrepreneurs are in your position than you think so it's fantastic that you're already thinking about it before things get too messy.

Danielle makes a fantastic recommendation on Fred Wilson's MBA series. I find a ton of useful information on there but be sure to put your own filter through it. Not everything is applicable to your business.

Since I want to stick to answering your question before volunteering my unsolicited two cents I'd also throw in David Baker's (Recourses) book on (I think it's called) financial management for marketing firms. As an entrepreneur I fully enjoyed the book and as a trained CPA I was surprised that he knows what he is talking about. Since you are in a similar industry you will find it very helpful.

And here goes my unsolited two cents on agreeing with some of the people above on how I have found it to serve my business better when I choose to focus and spend my time on my core competencies.

Because of my background as a trained accountant and CPA I understood the importance of good financial data earlier than entrepreneurs who didn't have the same background. I wanted to do it myself because I could do it better than anyone else I knew - it was my craft - but I (relatively) quickly realized that accounting wasn't part of my core job description as a CEO. So I handed over the work to my team - heck - it was my business after all. I am still closely involved with my numbers but I am no longer involve in the day to day work of producing it. I have a team doing that and a controller to assist and advise me on things I want to know and work on.

There are tons of options out there to find help in this regard. Some education may be helpful in getting you closer to know what you want. Though the technical terms and/or features may not be clear - a business outcome from the initiative could be a great starting point for a good advisor to help you develop the solution you seek.

Best wishes and feel free to reach out if needed.

Michael

Donald Koscheka
Title: Principal
Company: Bluecloud Communications
(Principal, Bluecloud Communications) |

A great primer is "Finance for non-Financial managers" (G. Siciliano). I got turned on to the financial side of business (I'm an engineer by trade) by "The 10 day MBA" by Silberger. After reading this book, I went and got my MBA.

What my MBA taught me is to hire professionals to help you set up your systems - as Michael stated: your business will be better off if you focus on the business and let someone else handle the books. As your business grows, the bookkeeping alone will become a majore distraction.

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