Financial Intelligence for Entrepreneurs: What You Really Need to Know about the Numbers

How many of you look forward to talking about numbers (really)? The truth is that most entrepreneurs only have a very rudimentary understanding of finance. The problem is that having little or no skill in gathering, organizing or interpreting your company's finances can lead to less-than-perfect, and sometime disastrous, decision making. That's why BusinessCast podcast (www.businescast.ca) co-host Robert -- a longtime believer in helping entrepreneurs gain financial intelligence -- and I are constantly looking for tools and resources that breathe life into the "numbers side" of your business. And, that's why we're so happy to have identified "Financial Intelligence for Entrepreneurs". In BusinessCast #98, Financial Intelligence, we interview co-author Joe Knight. He shares some nuggets but, perhaps more importantly he demonstrates his commitment to developing a truly practical resource. What impressed me -- and, I'm not a "numbers person" -- is how well this book is written. It's clear, concise and really, well...very human! Meaning, it doesn't feel anything like a finance or accounting text book that speaks down to you. Nor is it so dry that you're just aching to get to the end of the next paragraph. The authors quite successfully convey fundamental and complex ideas in a way that you'd wish your CFO could! If you're running a business and you're the least bit uncomfortable with business numbers, read this book....and read it, now. Other resources to help you tackle your finances include: BusinessCast Podcast #69 (www.businescast.ca) - Business Success By the Numbers - to help you get straight-forward answers to these common numbers-focused questions: 1. Should you buy or lease your car? 2. Should you invest available cash in your mortgage or an RRSP (IRA)? 3. Who should you sell your business to? Don't forget to visit the BusinessCast.ca

This book is very well written. The authors' style of writing makes this topic easy to absorb. The authors show you how to get insight from the numbers on financial statements and how that insight might affect your decisions. They also discuss some other financial calculations like ROI which was very helpful. Not just for business owners, this information would be helpful for anyone that wants to examine and understand financial statements. Probably the equivalent to a 200 course, this book is very useful by itself. It would also be a great foundation to build your knowledge on.

Financial issues always plagued my businesses for years - lost one due to lack of financial understanding now I see where I made my mistakes. This book will help me with my new busines - I plan to buy copies for everyone in my company.

As a classic small business owner who wears every hat, including CFO but not being very good at it, this book is an invaluable resource for me. I am one of those people who picked up Berman and Knight's original Financial Intelligence and said, "Hey, I need this information for myself and my business." The book takes you through the basics of P & Ls and balance sheets and cash flow and all of the financial mumbo jumbo that you aren't taught unless you go to business school, and turns it into tangible, easy to digest concepts that even someone with no financial acumen or education can understand. The most enlightening part of the book is the premise that finances are an art as well as a science. I always believed that numbers are numbers and they don't lie. Berman and Knight set me straight and set me free, teaching me that even as a non-financial expert, I can understand, manage and interpret my own bottom line.

Several years ago, I read and reviewed Finance for Managers, one of the volumes in the Harvard Business Essentials series. The material provided in it is drawn from a variety of sources which include William J. Bruns, Jr., Michael J. Roberts, and Robert S. Kaplan as well as Harvard Business School Publishing and Harvard ManageMentor®, an online service. Samuel L. Hayes served as subject advisor to Richard Luecke, author of this and other books in the Harvard Business School Essentials Series as well as more than 30 other books in the series as well as several dozen articles. What we have in Financial Intelligence for Entrepreneurs, co-authored by Karen Berman and Joe Knight with John Case (also author of Open-Book Management and The Open-Book Experience), are information and advice that respond directly to the needs of those who are planning to launch a new company or have only recently done so. I think the material will also be of substantial benefit to decision-makers in companies that seek to become more entrepreneurial. At a GE annual meeting, then CEO Jack Welch explained why he thought so highly of "small, sleek" business operations: "For one, they communicate better. Without the din and prattle of bureaucracy, people listen as well as talk; and since there are fewer of them they generally know and understand each other. Second, small companies move faster. They know the penalties for hesitation in the marketplace. Third, in small companies, with fewer layers and less camouflage, the leaders show up very clearly on the screen. Their performance and its impact are clear to everyone. And, finally, smaller companies waste less. They spend less time in endless reviews and approvals and politics and paper drills. They have fewer people; therefore they can only do the important things. Their people are free to direct their energy and attention toward the marketplace rather than fighting bureaucracy." This seems to have served as a model for "bowing up" of GE after Welch became its CEO in 1981. At that time, its market value was $14 billion; twenty-three years later, it was more than $410 billion. I share all this by way of creating a frame-of-reference for what is provided in this volume, a new edition of a book first published (entitled Financial Intelligence) in 2006. Although the focus in this second edition is on entrepreneurs, the material provided will help all managers to develop the entrepreneurial mindset to which Welch refers, and, to acquire a highly-developed financial intelligence quotient (FIQ). Moreover, they can then do everything they possibly can to develop a high-level of FIQ among others at all levels and in all areas of their organization. In the Preface, Berman and Knight explain what their reader will learn: 1. How to read the three major financial statements (i.e. income, balance sheet, and cash flow) and how to interpret what they contain 2. How to calculate critical ratios and to understand what they reveal 3.