Accounting: The Language Of Business

You probably already know that statistically most small businesses fail. In my experience, new business owners tend to be very cavalier about this (myself included) and it is quite scary how common this is. After experiencing small business failure due to lack of capital and poor management and planning, I used my experience to help other small businesses make better decisions. Did it always work? Of course not. However, it has given me a fuller perspective. And to gain more knowledge on the subject, I turned to formal education (as I often do). While in a master’s degree program for Business Management, I had to take Financial Accounting. At this point, I had been a Business Consultant full-time for over a year and had already formed my philosophy for Intentional Professionals (Person, Rules, Operations).

The first thing that I learned in this accounting course was that “accounting is the language of business”. That became an a-ha moment that quickly devolved into sadness and then great rage. Why? Because I realized that most of the clients that I (and my colleagues) consulted were not fluent in that language. Compound that with the fact that most businesses fail because of finances, and we have a bit of a dumpster fire. You cannot manage what you do not measure.

So...how are you documenting progress?

How are you goal setting?

How do you formulate plans?

What is holding you accountable?

Can you hire?

How do you scale?

What is holding your employees accountable?

When do you pivot?

When can you expand?

When should you fire?

Can you sell?

How do you know the value of your business?

It should be no surprise, but I am willing to bet that most owners that learn this do not make it their duty to learn said language. I have heard it with my own ears. The answer was usually to outsource the finances after they were making more money or do nothing. Translation: I don’t think I need that right now and would prefer to put it off until a much later time because I have no idea how to resolve this issue and don’t plan on doing anything about it at the moment. I have heard owners ask what P&L stands for. I have worked with owners who were making products but did not track their expenses or know that they needed to. I have seen former clients equate revenue and profit. A few sought and accepted help but most did not. The ones that did not simply figured that they needed more customers or sales. By the way, these were not just new start-ups.

Cash flow is the lifeblood of a business. Without (enough of) it, it will die. Imagine knowing that milk keeps a baby alive but refusing to learn how to feed it properly. The level of avoidance and deflection can create serious problems, but no one talks about this. These kinds of common situations are what led me to launch Intentional Professionals because it can make such a difference for business owners and their team members. As individuals, we deflect and avoid because we are ashamed of what we don’t know and are protecting our egos. We do not want to accept that it was our responsibility to learn what we needed to know and no one else’s. It isn’t healthy but the truth is that we will continue to stay in those circumstances until we make the decision to problem solve our way out of them. That will always require a level of radical self-honesty and to withstand what might be painful for healing and bouncing back better than before. I had to go through this myself before I felt whole enough to enter entrepreneurship again. For those of you that do not know, this has been a 10-year journey for me, and I finally feel how I want to feel about offering my creations to the public. I launched Intentional Professionals so that you can feel that way, too. I want to meet those of you who resonate with this message and are brave enough to seek me out. In the meantime, I’ll be here enjoying the view.

Sincerely,

-M