Thursday, November 18, 2004

A VC's guide to entrepreneurial success

VC Institute Bookstore -- Beste
3. They have a sound knowledge of the financial dynamics of their companies. By this I most decidedly do not mean that entrepreneurs need an accounting degree, or even an intimate knowledge of financial analysis. What I do mean is that they focus on key results areas, such as: gross margins, monthly fixed costs, sales/employee, sales to budget, dollar production/day - whatever factors drive cash flow and profitability in that particular type of business. Entrepreneurs exhibiting this characteristic can tell you (without looking it up) what the trend in gross margins has been over the past few months, or what the cash flow impact of a 20% shortfall in revenues would be next month.

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