Nearly half (42%) of small business owners surveyed by QuickBooks admitted they had limited or no financial literacy before starting their business and 45% of them say they’ve lost at least $10,000 in profits as a result of low financial literacy.
Entrepreneurs can often get caught up in the exciting aspects of business—branding, product development and social media—while financial management takes a backseat. However, understanding finances and developing some financial skills are critical for business success. With AI-powered tools like ChatGPT, entrepreneurs now have an accessible way to enhance their financial literacy, simplify operations and make more knowledgeable financial decisions.
For instance, with my business, I have a set date for evaluating our financial performance during the month. In this session, apart from reviewing our financial reports, we also consider the perspective of our trained GPT over the strategy we are using based on our business and financial goals; we use ChatGPT as a third-party perspective to give ideas on things we may not be seeing at that moment.
Here’s how ChatGPT can help entrepreneurs master five key financial skills:
Financial Skill No. 1: Prioritizing Expenses
One key skill to develop while running a business is recognizing its priorities. It’s understood that managing business expenses can sometimes feel overwhelming, especially when everything seems urgent and necessary to grow. However, it’s important to remember that not every cost is essential or directly linked to your goals. You can prioritize expenses based on timing, necessity, or return on investment. Not everything needs to be addressed immediately, and it’s all about understanding what will make a difference for your business.
ChatGPT can help analyze spending patterns, categorize expenses by necessity versus deferrable items, and create a budget that follows your business goals. It can potentially identify opportunities for cost-cutting while maintaining smooth operations, ensuring you’re reducing expenses in the right areas without compromising essentials.
Prompt to explore: “Hey ChatGPT, I want to reach [X goal] in [X amount of time] and need to get some help by prioritizing my expenses. Please act as a financial planner for my business, and your task is to create a priority table that helps me effectively visualize my expenses over time. The output should be a comprehensive, user-friendly document with all necessary information. Over the past three to six months, I’ve spent on [X input all of your expenses]. Can you help me break it down into essentials and non-essentials and point out areas where I can cut back without hurting my business?”
Remember to include details such as your financial goal, the target amount you have in mind, and the timeline for achieving it. Also, share your total income or the percentage of expenses you’d like to reduce in addition to any specific requests regarding non-essential expenses that you like ChatGPT to consider.
Financial Skill No. 2: Streamlining Cost-Effective Strategies
According to a Deloitte survey, 36% of 124 CFOs see cost management as a key priority. They highlight that one essential skill is identifying and implementing various cost-effective strategies that can boost revenue, lower costs and expenses, and ultimately maximize profit. ChatGPT can be a great ally for you in developing that financial skill. It’s great for entrepreneurs who want to stay competitive, as it can review expenses, spot potential savings, and suggest automation tools to improve efficiency. Plus, it can offer fresh perspectives and strategies for securing better deals or negotiating for the services and products you need.
Prompt to explore: “Hey ChatGPT, I want to reach [X goal] in [X amount of time], and I need to reduce my business expenses as much as possible to make it happen. Over the past [3–6 months], I have been spending on various tools, services, and operational costs, but I suspect there are redundancies and areas where I might be overspending. I need you to act as a CFO with expertise in cost management strategies to analyze my spending habits and identify where I might be overspending or paying for overlapping tools or services. Please suggest cost-effective alternatives for tools or services that may be replaced or consolidated. Additionally, I need a clear cost-reduction strategy with actionable steps to cut unnecessary expenses while ensuring my business operations stay strong. Here is a breakdown of my spending over the past [3–6 months]: Software subscriptions: [List all tools and their monthly or yearly costs], Marketing and advertising: [List expenses such as ads, PR, and content creation], Outsourcing and freelancers: [List roles and costs], Coaching and courses: [List any education investments], Business operations: [List rent, utilities, website hosting, office supplies, etc.], Other expenses: [List anything else]
I have locked-in contracts or subscriptions for [list services and contract terms], and I am willing to cut back on [list areas where you are open to reducing expenses].”
Financial Skill No. 3: Making Goal-Driven Financial Decisions
Ideally, every financial decision should move your business one step closer to your goals. However, it’s understandable that entrepreneurs sometimes can get caught up in reactive decision making due to a lack of planning or a clear financial roadmap.
According to Bplans, financial planning can help companies grow 30% faster than those not implementing it and with ChatGPT, you can start creating your goals and plans even if you don’t know where to begin; it can assist you in establishing clear objectives, defining financial targets, and tracking your progress to make daily decision-making easier.
Prompt to explore: “Hey ChatGPT, I want to make more goal-driven financial decisions to grow my business. I don’t have set financial goals yet, but I know I want to achieve [specific financial goal, e.g., $X in revenue/profit, X new clients, X% growth] by [specific timeframe]. My business primarily generates income through [revenue streams, e.g., coaching, digital products, memberships, sponsorships], and my current monthly revenue is approximately [$X] with [X% profit margin or cash reserves].
Can you act as the financial planner for my business or a skilled CFO and help me craft my first SMART financial goals along with key performance indicators (KPIs) that will guide my decision-making? Additionally, I’d love a breakdown of the steps I should focus on quarterly or monthly to stay on track.”
Financial Skill No. 4: Improving Cash Flow Management
Managing the cash-flow of a business is one of the most crucial responsibilities for any finance team—and as an entrepreneur, you are your own finance department. Keeping cash flow steady means ensuring you have enough liquidity to cover expenses without relying too much on credit or external resources. Staying on top of cash flow prevents financial setbacks that can slow down your business growth.
A solid approach to cash flow management includes keeping a close eye on accounts receivable making sure clients or customers pay on time and structuring payment plans in a way that optimizes when and how you receive funds. At the same time, it is about strategically timing your payments to manage liquidity.
For entrepreneurs, this might mean streamlining how you collect payments, whether it’s automating invoices, negotiating faster payouts from brand deals, or setting up recurring payment systems. Optimizing how money flows in and out of your business can make all the difference in maintaining financial stability.
Prompt to explore: “Hey Chat, I want to optimize my cash flow to ensure sustainable growth and achieve my financial goal of [e.g., $X in revenue/profit, X new clients, X% growth] by [specific timeframe]. My business operates in the [industry] sector and currently generates [$X] in monthly revenue with [profit margin %]. My primary revenue streams include [list income sources, e.g., coaching, digital products, memberships, services, etc.], and my clients typically pay [upfront, on retainer, invoiced with X-day terms, etc.]. My key expenses include [list major fixed and variable expenses, such as team salaries, software, ads, operational costs], and I currently have [mention any outstanding debt, loans, or other financial obligations]. My cash reserves stand at [$X], giving me [X months of runway] if revenue fluctuates.
To scale, my strategy involves [expanding product lines, hiring, increasing ad spend, entering new markets, raising prices, securing partnerships, etc.]. However, I need to ensure a positive cash flow while doing so. Can you act as a skilled CFO and create a tailored cash flow strategy that optimizes revenue, minimizes financial risks, and positions my business for growth? I’d also like recommendations on cost-cutting, revenue acceleration, and cash flow forecasting to ensure financial stability while scaling.”
Financial Skill No. 5: Developing A Revenue Opportunity Mentality
Developing a revenue opportunity mindset is another key financial skill that is important to nurture as an entrepreneur today. This perspective invites you to focus on maximizing income streams or revenue for the business.
For instance, if today you are a course creator but currently do not hold a community that can offer more in-depth knowledge or companionship to your customer, then developing that mentality will allow you to see that opportunity and create one or multiple ways you could drive revenue from what you are already doing or have thought to do.
ChatGPT can support this shift by identifying new income sources, suggesting pricing strategies and helping structure financial plans to prioritize stability and expansion.
Prompt to explore: “Hey Chat, I want to develop a revenue opportunity mindset to ensure sustainable growth and achieve my financial goal of [e.g., $X in revenue, X new clients, X% growth] by [specific timeframe]. My business operates in [ State your industry] and currently generates [$X] in monthly revenue with a [profit margin %]. My primary revenue streams include [list current income sources, e.g., coaching, digital products, memberships, courses, speaking, sponsorships, etc.], and my clients typically pay [upfront, on retainer, invoiced with X-day terms, etc.].
To increase revenue and scale, I want to identify and implement new monetization opportunities that align with my existing content, audience, and expertise. However, I need to ensure these opportunities are both sustainable and profitable. Can you act as a Revenue Growth Strategist and: [You can choose one or all of the following options: Analyze my existing revenue streams to identify underutilized assets, Provide market research and competitor insights to discover monetization trends in my industry., Suggest 2-3 new revenue opportunities I can test each month. Give actionable strategies to optimize my current offers and pricing.] I’d also like recommendations on revenue acceleration strategies, including pricing optimization, high-value offers, and audience engagement tactics to maximize conversions.”
AI could act as a business support role, offering fresh perspectives, creating financial roadmaps and recommending smart money moves that align with your business vision without the emotional biases that can get in the way of financial decisions. However, It is crucial that when using ChatGPT or any other AI tools you approach it with discernment; avoiding inputting sensitive business data and instead using hypothetical scenarios to maintain privacy.