Now is the time to finally get a handle on understanding your company’s financials and accounting. Listen, I get it. Most of us business owners did not go to school to start a business. Rather, we followed our interests and our passions, and then only later did we end up starting our own companies.
But this financial and accounting knowledge gap will come back to haunt you. Your lack of know-how can really hurt your ability to best portray your company’s value, especially when you’re looking to sell, buy, or merge a business. You’ll need to know how to “narrate” your business’s success using your financials.
We see this issue come to a head mostly for clients with under $5M in revenue. This is particularly unfortunate because a good understanding of accounting can help you run your business more effectively. This could even surface areas where costs could be reduced, eliminated or operational efficiencies improved or new lines of revenue opened. Financials and accounting are the keys that unlock and portray your business’s potential and success.
At the end of the day, the most important reason to invest in improving your understanding of financials is that they illustrate and help drive your value.
To get this knowledge, we recommend taking free (or paid) courses from the Corporate Finance Institute (CFI). Please note that we do NOT receive a commission nor any other benefits for advocating CFI’s courses. They are highly skilled experts and provide a training structure that is easy to access, absorb and follow. It’s everything you need with an online course.
Here are the top three courses that I recommend:
- Accounting fundamentals course (Free) – This course will walk you through the layouts of the balance sheet, income statement, and cash flow statement. You will learn the value of each statement and how they relate to each other as well as how to prepare financial statements, how each of the statements relate, and the importance of each component. It’s critical that owners understand the true value of cash flow statements.
- Reading Financial Statements (Free) – This course will teach you how to read your company’s financial statements and annual report to determine your financial strength as well as improve your business decision making process. You will learn to read a balance sheet using a company case study. You will develop a solid understanding of the specific accounts in a typical balance sheet, income statement, cash flow statement, and annual report.
- Introduction to corporate finance (Free) – This course will explain all the key concepts of corporate finance as it related to investment banking, equity research, private equity, corporate development, financial planning & analysis (FP&A), treasury, and much more. In addition, you’ll learn these fundamentals:
- Who the key players in the capital markets are
- The main business valuation techniques
- Types of valuation multiples
- How to structure a deal
- How to finance an acquisition
- Types of debt securities
I believe so strongly in the quality of the trainings above that I require every member of my team to take them as part of their extensive business valuation training process. It’s only after taking these courses that they can progress to the Financial Modeling & Valuation Analyst course and then on to the NACVA’s Certified Valuation Analysts training.
Are you ready to determine your company’s value? Contact us now.