Finance 101 for Entrepreneurs: What You Actually Need to Know

Running a business means wearing many hats — and if you’re like most entrepreneurs, “Chief Financial Officer” probably wasn’t the one you were most excited to wear.

But here’s the truth: You don’t need to be a CPA or finance wizard to understand the numbers that matter. You just need to know enough to stay in control, make confident decisions, and avoid costly surprises.

At Riviera Ledger Group, we work with small business owners every day who are great at what they do — but who’ve been flying blind when it comes to their finances. If that sounds familiar, this guide is for you.

✅ 1. Know the 3 Reports You Actually Need

You don’t need dozens of spreadsheets. These three reports tell you most of what you need to know:

• Profit & Loss (P&L) Statement: Shows your revenue and expenses over a specific period. This tells you if you’re actually profitable — not just busy.

• Balance Sheet: Shows what you own and what you owe. It’s the snapshot of your financial health at any given time.

• Cash Flow Statement: Tracks how money moves in and out of your business. Remember: You can be profitable and still run out of cash.

  
  

💡 2. Separate Personal and Business Finances

It’s a simple step that makes a huge difference. Open a dedicated business bank account and never mix personal and business spending. This protects you legally, simplifies bookkeeping, and makes your life way easier at tax time.

🔍 3. Understand Your Break-Even Point

How much do you need to make just to cover your costs?

Knowing your break-even point helps you price your services properly, plan for growth, and avoid surprises during slow months. This is where a good bookkeeper or fractional CFO can really help clarify your numbers.

🧾 4. Keep Your Books Clean (Consistently)

Messy books lead to missed deductions, late tax filings, and confusion when you need to make a big decision. Staying on top of bookkeeping each month ensures you:

• Always know where you stand

• Avoid IRS headaches

• Make smarter choices (like when to hire or invest)

If you’re doing it yourself, block time every week. Or better yet — outsource it to someone who does this for a living.

🛠️ 5. Use the Right Tools

If you’re still using spreadsheets, it might be time to upgrade.

Tools like QuickBooks Online, Xero, or Wave can automate a lot of the heavy lifting. Just make sure they’re set up properly from the start — because bad data is worse than no data.

🎯 6. Look Beyond the Numbers

Finance isn’t just about keeping score. It’s about making informed decisions.

Do you know:

• Which products or services are your most profitable?

• Where you’re spending too much?

• What your margins really are?

  
  

Answering these questions gives you control. And when you have control, you can grow with confidence.

Final Thoughts

You started your business to do what you love — not to stress over spreadsheets. But when you understand the basics of your finances, you’re not just surviving — you’re building something sustainable.

If you're ready for a partner who can help you take control of your books and your future, we're here to help. 📩 Schedule a free consultation today