I recently heard a seasoned business executive say that the biggest and most crippling mistake that entrepreneurs make is that they do not realize the importance of having the correct experience level in key roles at their company. Too often people hire people quickly to "fill a position", and make decisions based on a gut feeling that they just "like" the person.
Additionally, many entrepreneurs mix up important business terminology and use the verbiage interchangeable. Are marketing, business development, sales, PR and networking all the same thing? Does one skill set mean the person can perform in all five disciplines? Many entrepreneurs think they understand these areas of business (and some do), but often they hit a wall when they are expecting a magic bullet and getting no results.
Things gets worse when it involves the money. Far too many falsely believe that "CFO" is just another word for "bookkeeper". They hire anyone who can add numbers to run their finance department with more of a concern for the individuals salary requirements than they put on expertise.
Think for a minute about these terms: CFO, finance professional, accountant, bookkeeper, controller and CPA. All of these are different, and people whom hold these roles have a variety of levels of experience.
An entrepreneur needs to understand the numbers of his company, and just hiring someone to oversee the finances without being personally engaged is a mistake. Cash is king. Your financials are the lifeblood of the company and for this reason you must find the right person to help model, forecast, and control finances.
I work for an operational accounting firm, and thus I am surrounded by amazingly experienced financial professionals. While I am not a "numbers guy" (I am much more the sales and marketing type), their views have rubbed off on me. I have become educated on the need for understanding and interpreting a company's financials in a business of any size. This is not an area to be entered into lightly.
However, I often witness entrepreneurs who are "winging it" when it comes to the numbers. This is not good. If you run a business and feel light in the numbers arena, then you have to be sure that you become educated not just about how to read your balance sheet and income statement.... but also on what and who you need in your finance department.
Ask a lot of questions of your bankers, lawyers, auditors, and other trusted advisers and they will gladly point you in the right direction to find the guidance you need. Why will they so readily help you? Because they need for your company to succeed in having the right financial oversight in order for you to have long term sustainability (and pay their invoices!!!!).
The company I work for can also help you in these areas, see www.vcfo.com for more information (yes, a commercial in the middle of my blog).
Have A Great Day.