Brad Feld the venture capitalist explained very succinctly what he likes and dislikes about early stage entrepreneurs raising money.  He states in the May issue of Inc.: they are “the ones who can explain their business on a whiteboard. They don’t need a 42-page Excel spreadsheet…they don’t need a CFO to explain the intricacies of their model.”  He wants to see how you think about your business, understanding the different pieces and how they need to interact.

While not all businesses will need venture capital and some will need loans, this is a nugget of good advice.  All CEOs need to be conversant in the financial statements of their company.  If you avoided accounting and finance so far now is the time to enlist the aid of a CFO or someone similar.  Use this individual to quickly bring you up to speed on the financial details of your business model.

I learned over the years I served as a CFO that all CEOs understand to some degree of the financial aspects of their business.  All I needed to do what track the questions they asked, often the same ones weekly and I could figure out what metrics mattered to them.

Now that you have a senior financial person on board ask them to develop a basic dashboard or flash report from the questions you ask.  If you start there you will eventually understand how to read the balance sheet, income statement and cash flow of your business. And the statement you need to learn to read first is the cashflow.