If you want to learn how to use finance to run your business
Don’t start by studying the stock market
Or by hiring a fancy analyst.
Start by setting business goals.
Why?
For my programmers in the room:
How do you learn a new language most effectively?
Do you:
A. Take classes and learn about each syntactical concept and best practices before ever writing a line?
B. Start with a blank slate, not really knowing what you’re trying to build?
OR
C. Pick a project for something you'd like to create and try to write it in that new language you’d like to learn?
From my short time as an engineer, I found the best answer is C: You learn fastest by trying to build something that does something.
It’s the same with finance.
If you just start willy nilly putting numbers on the page, you won’t get anywhere quickly.
But if you start with a goal or question:
How much profit do I make per product?
I want to hire 3 people in January. How much cash will I have left in April?
How much am I likely to make in revenue next month?
I'd like to increase overall company profit to $100k. How can I do that?
That’s when you really get somewhere.
Start with the goal,
The rest of it will follow.
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