People avoid looking at the numbers for many reasons.
I explained my top list of reasons why people avoid looking at the numbers in a previous article. But I believe that you don’t need to avoid looking at the numbers, so let me dispel those reasons for you.
This one makes sense. If you’ve not had some basic training on the core financial concepts then you don’t have the knowledge or understanding. The challenge is to understand the importance of seeking out that training.
There are many skills required in business. The key is that you don’t have to be an expert in all areas. As the business owner and leader, what is important is to have an overview and general understanding of them all.
When you started in business, did you have all the skills you needed from the get-go? Perhaps yes, perhaps no. If no, did you learn about those areas as your business grew? You may have learnt through trial and error, or you attended a workshop, did a course or sought out experts who provided you with the knowledge you needed.
The same is relevant for the financial components of business and the need to be looking at the numbers. I see the lights go on in the audience when I’m speaking. I see the impact with clients when I’m working with them one-on-one and they start telling me what their numbers mean. Then I see the impact it has on their business over time, with improvements in all aspects of the numbers.
Lack of confidence comes from a lack of knowledge. It is also related to your view on how complicated something is and whether you believe that you will be able to understand it.
I can assure you that accounting and financial numbers aren’t as complicated as you may think.
Do you remember doing calculus and trigonometry in maths in school? Now, that was complicated. However, accounting is mostly additions and subtractions. There is some multiplication and division and also the use of percentages. That’s it!
So if you think you can add and subtract ok and handle a few multiplications, divisions and percentages, then it isn’t complicated. You will have the confidence if you spend a small amount of time learning about the concepts.
John came to me for help when he started his business twelve months ago. He had absolutely no idea about the financial aspects of the business. Now he’s running his business like a pro. He understands the cashflow and the profitability of his projects. He knows what is due for payment and when and when he expects his clients to pay their invoices. At the same time he now has the confidence he didn’t have a year ago.
I get this. No one wants to admit they don’t know or understand something, even more so when it relates to your business. Pride often gets in our way. We don’t want to admit we don’t know or understand and so we nod our heads or avoid the questions.
But, if you make the effort to learn a little, you will reduce or eliminate your embarrassment and probably knock out the pride problem too.
You’re never too old and it’s never too late to learn about your numbers. I was talking to a lady who has been in business for over 15 years. She said that when she read one of my books and started to delve into the numbers she realised how much she didn’t know. Now it is making a massive difference to the way she runs her business. She ha the knowledge and confidence to make better decisions.
Now, I can’t help much with this one. You know the saying “you can lead a horse to water, but you can’t make it drink”, well I think this applies here. I would encourage you to start drinking. Take some small steps to learn about the numbers, cashflow, break even, gross profit and so on.
There are no reasons for you to avoid looking at the numbers. It’s never too late and now is the time to take the proverbial bull by the horns and take a peek at those numbers.
Originally published on www.smallville.com.au