Ep44- Food Startups Finance 101 with Joe Knight

"How is business going? It’s good.." If you are an entrepreneur, everyone asks you this question. How do you know it’s good? Financial health; key financial metrics. It turns out that even top level execs lack a complete understanding of basic financial principles.

Joe Knight, co-founder of the Business Literary Institute, teaches C-level execs at Fortune 500 companies basic financial literacy. He honed his skills at Setpoint Systems, where they have clients like Tesla Motors. I know him through his book: Financial Intelligence for Entrepreneurs.

In the episode, we talk about:

• The importance of financial literacy for EVERYONE in your company, not just the "finance people".
• Why and how to consider finance when making large investment and business decisions.
• If your current ratio is less than 1, your company is probably not  a good place to work.
• Cash flow and it's vital importance to the health of your business.
• Extra: A crucial tip from Matt on container shipping.

Mentioned in this episode:

Vocab (definitions by Investopedia) -

Current Ratio

Quick Ratio

Free Cash Flow (FCF)

Burn Rate

Gross Profit Margin (Note: Joe breaks this stat down to a per hour basis)

EBITDA

Return on Investment (ROI)

Return on Assets (ROA)

Links -

Setpoint Systems

Financial Intelligence for Entrepreneurs.

Business Literacy Institute

Return on Investment Toolkit - Harvard Business Review

Are Your People Financially Literate?

Joe Knight Bio:

Joe trains managers and leaders at Fortune 500 companies such as Electronic Arts, NBC News, General Electric, Granite Construction and UTC Aerospace Systems. Joe’s unique ability to combine content with energy and humor make his keynote addresses resounding successes with diverse audiences including the Construction Industry Institute; Independent College Bookstore Association; The Association of General Contractors; International Institute for Supply Management; and Society for Human Resource Management.

Joe is co-author of Financial Intelligence, a smart, no-nonsense business finance handbook for managers. The book has been heralded as “the Elements of Style” of finance by CFO.com. Financial Intelligence was featured in The 100 Best Business Books of All Time and has been turned into a graphic novel by Smarter Comics. Joe also co- authored Project Management for Profit which outlines the easy-to-implement system he helped create at Setpoint to manage projects towards profitability no matter what stage the project is in.

Joe is co-owner and CFO of Setpoint Systems, Inc, a manufacturing company based in Ogden, UT.