Transcript

Understanding your business
I’m often asked: “What is the most important thing that an entrepreneur should know?” And the answer is actually really simple: An entrepreneur has to have more than a good idea, has to have much more than lots of energy. An entrepreneur has to have an understanding of how money flows through a company. This is business finance. They have to really understand not only what their sales are going to be but what their net profit is going to be, what the tax implications of the business might be. And most important they have to understand what the potential return is to their investors.

What if I need help?
Fortunately, in the world, there are a number of people and organizations who can help an entrepreneur, decide how much of the company each investor should receive in return for their investment. This is a very sensitive issue. In general, the most important advice for an entrepreneur is an understanding of how money flows through your company. I’ve often thought that it’s a good thing that I’m a founder of Starbucks Coffee Company because people will listen to me saying that. If my company wasn’t famous, they would all leave the room when I say that – “That’s not important. What’s really important is the idea” – not true.