When Will We Ever Learn?
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When Will We Ever Learn?
Would you drive around without knowing where you are going, or where you have been? No of course not, yet in business too many small business CEO's do precisely that.
By: Michael Davel Anderson
Would you drive around without knowing where you are going, or where you have been? No of course not, yet in business too many small business CEO's do precisely that.
By: Michael Davel Anderson
I never fail to be amazed when clients say something like "I do not know my profit last year, my accountant is still working on it." Sometimes we are having the conversation in September, nine months after year end. The accounting process is the main measurement system which tells us if things are going well, and here we are well into next year and we have no measurements for the completed year. We just hope!
When we talk about measurement, we are not talking about how much tax we are going to pay. We are talking about questions like, "How is my employee productivity?" or "Is it service or installations that makes me money?" Many small business owners hide behind comments like, "All this accounting stuff is too complex for me. I am a tradesman"
So why do small business CEO's react this way. Maybe the accounting profession is to blame. They don't want us average folk to know that there is no mystery in accounting. If you can add and subtract you can do every operation in accounting, and with just a little training, understanding financial statements is no more difficult than reading a blueprint or a job spec. Reading blueprints and job specs is something the small business CEO does routinely, so why not learn to read financial statements.
I say it is simple to understand financial statements and I stand by that statement. I promise my clients that they will say it too. All that is necessary is for our Small Business CEO to start acting as a CEO. Taking the plunge to be trained, to get the training which they need to do their job, will be the best decision they make this year.
We are not talking about learning to be an accountant, but the small business CEO should know how to interpret the information he is given and to know what information he needs and must ask for. In other words, know which map to ask for, and know how to read it. It is just as simple as that!
When we talk about measurement, we are not talking about how much tax we are going to pay. We are talking about questions like, "How is my employee productivity?" or "Is it service or installations that makes me money?" Many small business owners hide behind comments like, "All this accounting stuff is too complex for me. I am a tradesman"
So why do small business CEO's react this way. Maybe the accounting profession is to blame. They don't want us average folk to know that there is no mystery in accounting. If you can add and subtract you can do every operation in accounting, and with just a little training, understanding financial statements is no more difficult than reading a blueprint or a job spec. Reading blueprints and job specs is something the small business CEO does routinely, so why not learn to read financial statements.
I say it is simple to understand financial statements and I stand by that statement. I promise my clients that they will say it too. All that is necessary is for our Small Business CEO to start acting as a CEO. Taking the plunge to be trained, to get the training which they need to do their job, will be the best decision they make this year.
We are not talking about learning to be an accountant, but the small business CEO should know how to interpret the information he is given and to know what information he needs and must ask for. In other words, know which map to ask for, and know how to read it. It is just as simple as that!
With 45 years of experience in leading positions in business across North America and internationally, Mike Anderson knows the business of business. More important, he has learned how to teach it. He is now consulting to small and medium sized companies, specializing in CEO and senior management training. Please Visit www.trainmetobeaceo.blogspot.com
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Mark-Up Or Margin - What Is The Difference?
