Here is an interesting one – finance. I believe that most people will think that if you know how to add up the dollars and you have a clever accountant doing your books, you are fine.

Small businesses thrive with good leaders. Big businesses thrive with good managers and a few good leaders. A manager has the luxury of being competent only within a narrow field. But to be a leader, you will need to have an awareness broader than the step immediately ahead of you.

Financial competency is important for several reasons:

You cannot have a good plan without understanding all the constraints, and finance is usually a big part of the picture
Finance is one of the pillars of your business and you cannot be blindly trusting that your “clever accountant” is taking care of you because he will not understand the other parts of your business
You are usually the one to take all the major money decisions, this cannot be done without knowledge and understanding of finance

I realise that “finance” might mean different things to different people. So, let me clarify a little. Finance is not about knowing whether your company makes money or not. It is not about knowing the price of your goods and their cost. It is not about doing the taxes. Finance is all these things and more. It is a management discipline that requires a lot of knowledge and skills.

You do not need an accounting degree to understand finance. But you do need to have a good grasp of the concepts and you need to know the policies of your bank, tax and corporate law and so on. The professional accountant and your tax lawyers are technically competent in their respective areas. But you need to have the ability to put it all together. Cashflow management comes to mind as one of the areas where small busineses typically fail.

If you are lacking, it might be good to consider investing in some education. “Finance for Non-Financial Managers” come to mind as an excellent course to take. But to think that your marketing brilliance or your great salemanship will carry you through without the “bother” of these “little things” – think again.