Business leaders need to personally understand their core financial numbers: money in, money out, and runway. Many high-revenue companies outsource this to a CFO and lose touch with cash flow reality. A simple self-built spreadsheet tracking essential metrics keeps owners grounded in how the business actually works.
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.
