"A goal without a plan is just a wish."
– Antoine de Saint-Exupéry
There are two things that most business owners can recognize immediately, and that clever business owners know to steer clear of: FIRE AND SAND. At some point in business it is inevitable that you will be confronted with a dilemma. Not enough time. Not enough money. Do I extend credit in order to make the sale? Do I break my own rules, just this once? This customer doesn’t pass the smell test, but I need the business. Do I take a draw or make my payroll? Do I pay CRA or do I buy groceries?
These are all fires, which start out as a small sparks and burn slowly, until they consume your resources. Fires don’t go away spontaneously without taking everything with them. If you don’t deal with these issues when they are manageable, you will pay dearly down the road, guaranteed. The brighter the fire burns, the more resources required to extinguish it. That’s what problems are, a form of fire that suck the oxygen and energy out of you when you need it the most.
It’s human nature to want to do what we like, but as successful business owners we need to exercise discipline. No one is in business to do bookkeeping or to keep records. Most business owners hate the administrative chores that come with business ownership. Selling is fun. Human interaction is at times entertaining. Producing and making things is fun. Bookkeeping is simply necessary drudgery. However, ignore it at your peril! You need a way to keep score, and to gauge your progress. The tabulated numbers tell a story. If you can read those numbers and use them to forecast trends and changes and isolate weaknesses, you will avoid the fires that have consumed so many businesses, small and large.
If you don’t like the administrative side of your business, then hire someone who does and liberate yourself to do what you do best, MAKE MONEY! But do not ignore the necessity for and the value of the information and what you may glean from it. Think about it: what if you had a crystal ball that was generally right most of the time? Wouldn’t that be valuable in your business? Well, guess what? You have that. You just need to look at it, and the more you look at it and understand it, the more value you’ll derive from that data.
As a business owner you need to know about sand. It’s a great place to duck your head, and avoid the bad things in the world. Just pop your head in the sand and the world will be fine. You’ll never see the fire coming, and what you don’t see can’t hurt you, right? Besides, there is always divine intervention, isn’t there? Personally I believe in physics. If you cross against the light as a truck is bearing down on you, it’s unlikely that the hand of a supernatural deity will swoop you up and out of the way; it’s more likely that you’ll end up at the Pearly Gates asking, ‘What happened? Where were You when I needed You?’ Sand is not protection against fear and uncertainty. Knowledge and experience and insight, that’s what you need to build a castle.
I would love to hear from you and invite your questions and comments. You can reach me by e-mail at skca@idirect.com. With three decades of experience as an accounting professional, consultant to small business and business owner, there may be a few things I can help you with. Call me. Best wishes, Sid.