The most important financial skills every entrepreneur should possess – By Nick Rojas, a business consultant and journalist, written for Millo, a freelance job website. November 21, 2018. Lists and describes the following skills:
- Understanding credit
- Budgeting
- Project Management
- Investing
- Borrowing
Accounting for Entrepreneurs: 5 Skills You Need to Know – Written by staff, Harvard Business School Online. Lists the following skills:
- Managing cash flow
- Managing a balance sheet
- Identifying a path to profitability
- Communicating about money, including about. . .
- Employees, vendors, investors, and other stakeholders
- Terms of payment and descriptions of the scope of work
- Protocols for everything related to payments, especially for working with multiple invoices, purchase orders, vendors, and tax accounts
- Forecasting the future of your business
It also discusses other financial skills needed for entrepreneurs:
- How to find investors
- Key accounting concepts to make decisions: balance sheets, budgets, profit and loss, cash flow, and spending
- Keeping current and accurate books
- Monitoring income, expenses, and cash flow
- Knowing how your business is doing financially at all times even if you outsource accounting
- Working with a tax professional to save money
Sales skills, or prospecting—which involves creating a database of potential customers and converting them to actual customers—is another important, related set of skills to have or recruit someone to fulfill.
Other Resources
- Financial Skills Every Entrepreneur Needs to Succeed – Written by Maker’s Row. January 24, 2018. Describes skills such as learning how to budget, spending money wisely, and borrowing responsibly.
- How Entrepreneurs Can Manage Their Business Finances With Success – By Melissa Houston for Entrepreneur. May 5, 2021. Offers tips on managing business finances, including keeping personal and business accounts separate, learning about finance so you can make informed decisions, and working with a tax professional.
- How Important Are Financial Skills For Entrepreneurs? – Techie State. November 7, 2019. Discusses various finance aspects, such as balance sheets and cash flow accounts, that business owners should understand even if they don’t personally deal with the finances.
Tip on Credit Scores: Some investors may look at your credit score as a measure of your financial skills and responsibility. It may be worth the effort to try to improve a low score.
