It may surprise you to learn that your financials should not be left to a bookkeeper alone. In order to understand a business and avoid making mistakes, you must understand the numbers that drive the important metrics–cash flow and revenue–that fuel your venture.

Founders School’s new series “The Art of Startup Finance” with Bill Reichert provides a clear picture of the important ways to understand, in financial terms, what has happened and what is happening in your business. A seasoned venture capitalist with Garage Technology Ventures and an entrepreneur, Bill provides critical knowledge that will help you get your numbers just right. He builds a strategic pyramid to help you understand the essential elements of your company’s finances.

Over and over again we’ve heard from founders that understanding the basic elements of finance, and how to use them, is something with which they need help. Here we provide some lessons that can enhance your financial literacy and help you understand how the work that you do translates into financial data and can help you set goals, evaluate progress, and project performance into the future.  

Through nine critical lessons, Bill provides you with the tools of finance you’ll need to document and understand your company’s numbers, and, ultimately, turn your vision into reality.

In this series, Bill provides some of the following lessons:

• How to incorporate elements of the business model, including spending on sales and marketing, and assumptions regarding pricing and revenues, into a business model formula. 
• Create a budget that details a plan for spending money over the next year, fueled by key drivers of expenses and revenues and designed around key milestones the company has to hit.

• Failing to meet your budget is one of the things that can get you fired by an investor.  Understand your operating budget and how to use it to understand what is going well, and head off at the pass the things that aren’t.

• Use monthly reports as learning opportunities to identify what was expected to happen, what actually happened and why there may have been a difference between the two.

“Sometimes entrepreneurs think they can leave the finance and the numbers to the bookkeepers and the accountants,” Reichert said. “But entrepreneurs really need to understand the underlying financial flows of the business. That’s key to understanding how to manage your business.”

From how do I structure my balance sheet to do our long term financial projections match what we’re asking for from investors, we hope this series provides you advice and guidance as you work to grow your business through its next milestone. Explore the series and ask yourself the pivotal impact question:  How can what I’ve learned today change what I do tomorrow?