Ask Christa! How Much Finance Should I Learn? (S3E33)

Introduction and Listener Question

Hi everyone and welcome to Ask Christa! the place where you can ask questions about how to work through business challenges and workplace issues. I'm Christa Dhimo and today’s listener question is focused on a single department, THE department most people think when you say “business.” For that reason, I’m thankful for this question because it gives me a chance to clarify a few things and clear up the myth about what business is all about, because it’s definitely NOT about just ONE department.

 The listener question has context, too. Here it is, “I turned 40 earlier this year and just got laid off. The lay off helped me realize that I really want to start my own business. I’ve been watching your show for a couple of months, digging in into your resources, and the content not only helped me build a business plan, but also helped me bring two impressive Advisors on from a local accelerator program. My background is in market analytics, so I feel confident in that part, and I’m confident about the product I’m building. I’m not CONFIDENT in finance, though, and my understanding is that FINANCE is the heart of a business. Help. How much Finance should I learn?”

 First, to the listener: thank you for your kind and generous words about how my show has helped you. What you describe is EXACTLY why I started this show, and for those who know the inception or have followed me from the beginning, you know that I’m not here for the numbers, I’m here for the impact, and if I can impact just one person in a good way, especially when it comes to the deeper and more pervasive issues in the workplace, then… that’s a good day for me because hopefully it leads to better days for others. So listener—thank you for letting me know the impact my show has had.

 The Heart of a Business

OK—the question. Well, the short answer is: learn as much as you need to learn to add the most value in your current role as a founder, then learn anything else you may need to learn to develop yourself for your future roles. And that’s not just for founders. That’s for anyone when they’re thinking that finance is the heart of a business.

 To this listener in particular, I would say you have a lot of the critical skills needed to successfully start up a business, and I applaud you for taking your lay off as an opportunity to follow an instinct while also being responsible about it. Your skills are truly foundational skills that a lot of founders DON’T have, and they often run into a lot of problems because they aren’t thinking about market or market analytics or market fit. Many founders start with how great the product is—an IMPORTANT starting point, but… don’t knock the market analytics piece, That’s what is telling you where there’s a there there… or however that saying goes…

 The Persistent Myth That Business Is About Finance

I’m going to take it one step further though and focus on something that I think is part of this question and really important.

 There is a persistent myth that business people are finance people. It might be from 300 year old paintings where they show the merchant counting gold or old-timey movies where someone in a suit with neat hair would handle the money, and the workers were in the background.

 I’m not naïve—I know where the sense of finance being the heart of the business comes from, especially growing up in a country with a capital economy ruled by supply and demand. But if you know what it takes to startup a business, manage a small business, grow a business, buy businesses, sell businesses… make money, avoid and manage the risks that lead to you LOSING money… then you know it takes A LOT of other functions to keep a business going. In fact, the finance piece reports on history—what has already happened. 

 But as a LAGGING indicator, your financial metrics are based on what has ALREADY happened, and to me—as someone who has fixed a lot of BIG issues, including a rather large setup of a start-up just 10 weeks before its first product approval—it’s REALLY important to get to the LEADING indicators whenever possible AND track progress through a variety of metrics, SO THAT you understand not just your financial health, but your business health overall. I’m not saying lagging indicators don’t matter. I’m saying they are but ONE indicator of company health, and the best performing organizations know this.

 But your LEADING indicators—those are key, also, and you know where you can find those? The ones associated with… PEOPLE. And not just your employees, but your vendors and partners, too. 

 Those who FEEL INVESTED in the success of your business will work hard to feel successful when given the chance. Employee engagement numbers, the quality of supply on arrival, the on-TIME shipping of your products… the measurables BEFORE and WHILE your product is made and BEFORE you ship and eventually register your revenues—those metrics will serve you, and most of them are not financial metrics. They are part of overall performance metrics, and THOSE are the heartbeat of a business.

 And.. a lot of times… you can get ahead of troubles and into better pastures when you connect with your people: employees, vendors, and partners. Sometimes that happens in Finance, but there are various other support functions in an organization, too.

 The G&A Functions (lots of them)

So I’m going to take a quick moment to talk about the function of General and Administration.

 General and Administration, or G&A, are those indirect expenses in a business. By “indirect,” I mean they aren’t directly tied to your product or your service. Their cost, per se, do not directly impact your products or services, either, and those who work in G&A functions are not touching your product or performing your services. 

Instead, G&A support the success of you and your products and services through their own internal expertise and service to the business: marketing and sales understanding the market and creating that demand. Legal setting up and managing your IP strategy while legally protecting your organization. Human Resources or Human Capital—The People Department—as well as Corporate Communications. Cybersecurity and IT. And, yes, Finance.

These are functions that support HOW your business is run and HOW your services or products are created, sold, and delivered, or returned or terminated, as what happens when you stop providing a service to a client. In these roles, G&A are like internal consultants with expertise within their function. Early on, G&A might be contracted out or outsourced (check out Episode 30), but as an organization grows and emerges from startup, most times G&A becomes full departments with full time employees.

ALL of your G&A experts support the smooth running of your business based on their functions, or domains, while also stewarding appropriate compliance and effectiveness, enabling the organization to work within the necessary obligations of laws while also managing the workload in a way that doesn’t overload the organization with unnecessary processes. 

 But again, they don’t touch the product, like quality and manufacturing will, nor do they deliver the service, like consultants do with their billable hours. Those are direct costs—they directly impact the products or services.  G&A, remember, are indirect. There’s a little more to it, and indirect costs include a few other things, but I’ll leave it at that.

SO… back to FINANCE. Rather than thinking of it as the heartbeat of a business, I want you to think of it as a department that expertly tracks money flowing in and out of an organization. They also consult and advise OTHER departments with what the world might look like or currently looks like if or when people go over or under their budget—but YOU as a business owner, or if you lead a team or a department—YOU own your budget and how you spend your budget based on what is approved; Finance DOES NOT own your budget. They are there as part of G&A to provide expert support and a consultative service within your organization as it relates to… Finance. 

And so YES, Finance is an IMPORTANT function, but so are A LOT of other functions, and while I don’t want to diminish Finance at all—I’ve reported to a lot of Chief Financial Officers, shout out to John Golubieski, who remains one of the best managers I’ve ever had—I want to be sure everyone understands there are a lot of other critical G&A functions, too. 

For example, I’ve reported into some of the best and worst Chief People Officers, Chief Commercial Officers, and Chief Operating Officers. 

If you want to run a successful business, if you want to get the BEST performance—which should absolutely be one of your top goals, the first thing you’ll do is shift your mindset to see business as a process or a system with various functions, all critical to your business for different reasons. There will be some instances when certain functions have the spotlight—for example, if you are in biotech or pharmaceuticals, your Chief Medical Officer may be the most critical leader in your organization next to your CEO, but there should never be one function that is superior over the others all the time and simply by way of their one function. Business is a team sport. 

In fact, if ever there is a one-person right hand to the CEO, it will be the Chief Operating Officer, where the CEO is externally facing and out on the road raising money while the COO is internally facing, running the business, and leading the day to day. That’s in part because a Chief Operating Officer is not in charge of a function per se; the role is overseeing with how the business OPERATES.

The second thing you’ll do to run a successful business is break the thinking that business is about Finance. Business is not about Finance, even if Finance is an important part of business. Business is about how you get all the work done and meet or exceed your goals, and Finance is about how you track and talk about money coming in and out of your organization, how you budget to use it in between reporting schedules, and how you plan your growth or recovery through a savvy use of cash and capital. There are times when Finance is critically strategic and enables a company to move through VERY difficult times with innovative and lawful ways to manage your finances, but again, business is a team sport. For example, we saw HR step into a highly critical role for those of us who were in the workplace during and after 911. At the time and in many organizations, nothing was more important than helping employees process, heal, and get back on track, especially those who were directly impacted by the day.

As a team sport, everyone has a role to play at different times in the game. And the best businesses—the most SUCCESSFUL businesses, know this. AND, they work that way, too.

Additional Resources

For your resources, I found a great finance overview article from the Indeed Editorial Team from June 2025. It’s called, “13 Basics of Small Business Finance to Know (Plus their Benefits),” and it’s not just for start-ups. Remember, if you want to learn about business, learn about startups. Start there because you’ll learn what you need to know from the ground up, which is a practical and efficient way to learn about business.

And if you want to learn on a more formal level, I found a great FREE RESOURCE that offers the basics on YouTube that is also in the show notes. It’s from Self-Learn-en, established for entrepreneurs and easy to follow. 

Not all the videos are equal, but I breezed through a few of them, and they offer great content. And I LOVE that they offer their learning resources for free. The one I’m highlighting is from May 2023 called, “Business finance 101, learn business finance basics, fundamentals, and best practices.” It’s just over an hour long, but if you want to learn the basics for the average entrepreneur, it’s the right one. It has a lot of sections, and each section goes through various points within a few minutes to about ten minutes. It covers the need for capital, cash flow and the different types of cash flow, demand forecasting (including your market analytics, or which customers will buy and when—which is REALLY important and why I highlight that the listener who submitted this question is probably well ahead of the game already). The video includes  pricing and growth, budget management, and of course revenue recognition—which is generally when a buyer buys something, the seller provides what was bought, and the seller can also show that some form of payment was received.

And of course, what would an Ask Christa! business episode be without an additional resource from the US Small Business Administration site. This one focuses on Calculating your Startup Costs, but it has a lot of insights and links to other aspects of understanding some basic finance items related to a business.

Final Thoughts

Here are my final thoughts. Within the context of the listener’s question, and for most of you, learn the basics of finance, which is the same whether you have a budget at home or at work: you need to make enough money to pay your bills. If you don’t, you have to start borrowing money. If you repay your borrowing and have good credit, that’s great—your credit score goes up and you’re able to borrow more money if needed and at a lower interest rate (which basically means—you’re low risk, you’ll pay it back, money likes you). But if you borrow money and cannot pay it back and have to borrow more, your credit rating goes down, and yes, this happens for companies also. Those are the finance basics related to business. After that, it’s learning about the more technical items, and the Self-Learn-en video I posted in the show notes will do that for you. 

And be GOOD to your financial planning and analysis team at work, be GOOD to those in finance who are there to help you with your budget process. It’s a slog for you, but it’s a bigger slog for them when they have internal clients who don’t want to collaborate or cooperate. This is twice as important if you are in a publicly-traded company because there are additional rules about how you track your budget, and if you’re credit rating is low or you are preparing for an IPO, you may have month-end close outs to balance the books versus just quarter-end close outs. It’s a lot of work for everyone, but your budget is YOUR budget, so stay tidy and take ownership so the process stays easy. And if there’s a way to improve it, talk to your Finance Business Partner to see how feasible an improvement is. And if you’re dealing with a team that doesn’t like new ideas… check out Episode 14 about presenting ideas to a rigid team.

But overall, take a holistic approach to learning about business as a system of functions without placing a higher importance on Finance unless you are seeking highly creative ways to finance your organization and in a few years you’ll have to explain it all. Your job as an entrepreneur, as a small business owner, as a CEO—it’s to LEAD the organization, and that means you HAVE to be capable of seeing the organization in totality without favoring just one or two functions.

Wrap Up & Submitting Your Questions

Okay, it’s a WRAP Episode 33… 

Keep the questions coming as always—I’m about to lock in the 12 upcoming episodes for Season 4, which is just three episodes away!  Go on to my show’s website, AskChrista.com, that’s Christa with a C-H, where you can submit your question and also see my latest episode, but explore other episodes, too. There the Strategy Series from Season One, various behaviorally-based episodes from Season 2, ranging from how to deal with a defensive coworker you can NEVER give feedback to (even help them) to a boss who interrupts you, and how to manage when you or others yells. I just finished up my Business Basics series from Season 3, which is getting good attention also. You’ll see my episodes are organized by category, so if you’re looking for content on strategy or leadership or business skills—even change management, you’ll see episodes for it.

Thank you for your support. And remember, if you have a business challenge or a workplace issue—Ask Christa!