CEOs of small and midsize businesses (SMBs) share many traits. They are risk takers, fiercely independent, and abundantly optimistic.

One trait they don't necessarily share is a high finance intelligence quotient (IQ).

No matter how great a product you've created or no matter how necessary a service you provide, if you don't know how to budget, manage cash, and plan, your business is almost certainly doomed to fail.

In a recent Inc. survey commissioned by Oracle, What's Keeping SMB Leaders Up at Night, the respondents were pretty confident they were on top of finance issues. In fact, only 15 percent cited finance and reporting as their biggest worry, placing it way down the list of worries.

For the purpose of this article, let's assume you are one of the CEOs/founders who fall into the category of "finance-challenged." How are you going to survive in a world of big data, constant change, and intense competition?

Survival begins with these four steps:

1. Get Some Finance Literacy

Even if you have a chief financial officer (CFO), accountant, or comptroller on your team, you need to be able to speak their language in order to partner with them effectively.

This doesn't mean you have to run out and get your Master of Business Administration (MBA) or become a certified public accountant (CPA). What it does mean is investing your time in learning the basics. At the very least, you need to be able to read and understand a financial statement.

Get to the point where you can understand your cash flow, operating activities, and investments. Develop a good working knowledge of your balance sheet, including assets and liabilities; your income statement including that all-important revenue; and the implications of outside investments in the company, including who's holding equity and how much they hold.

2. Make Finance a Priority: Hire a CFO

For many SMBs, finance is the company's single most important function.

How can you run a business effectively if you're not on top of the numbers?

Many business founders make the mistake of holding off on hiring a CFO until their business is going full bore. Don't be one of them.

If you have someone on your team who not only gets the accounting aspects of your business but also understands your business's vision and goals, then that person is worth their weight in gold.

With a CFO in place early in the game, you not only have someone who can crunch the numbers, but someone who can help drive success.

3. Watch Your Costs

Even the smallest businesses seem to accumulate an avalanche of bills. Labor, rent, technology, healthcare, communications, and networking are just some of the cost centers that eat away at your cash reserves.

To survive (and ultimately thrive), businesses must be extremely disciplined with their spending. There are certain areas where it doesn't make sense to scrimp, but there are many areas where smart companies can reduce costs.

Free or inexpensive technologies can reduce costs of communicating, marketing, and networking. Social media has helped to level the playing field in terms of marketing costs, hiring, and branding.

But there are other expenses where businesses need to fight for every penny. They must carefully research to find the vendors that deliver both quality and value, and then have the will and tenacity to negotiate favorable terms.

4. Trust Your Finances with a Reliable Cloud Provider

It's easy to run your finances from spreadsheets when your business is small. As your business grows and becomes more complex, that handful of spreadsheets can turn into an office full of spreadsheets.

Organizing and reconciling them can be a difficult, tedious, and time-consuming task.

The solution for many SMBs is to adopt a cloud-based enterprise resource planning (ERP) software solution.

ERP software takes a load off your shoulders by managing your entire operation and connecting all of your departments, allowing them to communicate and share data seamlessly.

Obviously, not all ERPs are created equal. SMB owners should look for an ERP with best practices built in.

A high-quality ERP can:

· Manage your financials

· Take control of operations

· Manage your supply chain

· Give access to the kind of reporting that allows you to make intelligent decisions based on real-time information.

This kind of agility can propel a CEO―even the aforementioned "financially challenged" CEO―to make the kinds of decisions that will lead to growth and success.

To learn more about how your financial team can become both the foundation and driver of growth, download our newest ebook - 5 Ways to Boost Growth by Improving Financial Function Effectiveness: What Every SMB CFO Needs to Know - today.

Published on: Feb 16, 2017