Mike Brown says business leaders must personally understand three to four core financial metrics: cash inflow, cash outflow, and runway. Build your own spreadsheet instead of outsourcing to a CFO, so you actually see how the numbers connect and can make real decisions.
Regardless of whether you're the CEO or not, you need to know your numbers. And what I see rampantly, even in high 6, 7, even 8-figure businesses, is that people will outsource their confidence. They'll hire an outsourced CFO and then they'll wait for them to compile reports. They'll send them over, they'll glance at them, and they'll never really understand what the numbers of their business are. And it turns out there's only like 3 or 4 numbers that every business needs, and they may be different depending on your business, but really there's some version of money in, money out, runway. Knowing those numbers cold, you really don't need to know a a whole lot else. And so what I encourage any business owner to do, even if you're just starting out, is to build yourself a spreadsheet. And it's really important that you build it yourself because you understand how those like 4 numbers end up affecting your business rather than hiring an expensive accountant and having them send you a report. But I'm owning those numbers like I'm not outsourcing my confidence to somebody else. So that's step 1.
