Home Forums Money matters bad with numbers. what to do?

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  • #993019
    16k_zx81
    Member
    • Total posts: 43

    Ive been operating for 7 years and I think I have managed pretty well with most aspects of the business, (service-based), but I am increasingly aware that I just am not equipped to understand the numbers, and probably lack the basic mechanisms that other business owners base their strategies on for pricing, and other aspects of business strategy.

    I have a bookkeeper, whom I gladly throw all the paperwork at once per month. I am very happy not to deal with it, if I am perfectly honest.

    And I have an accountant who does all the work at the pointy end each financial year.

    I had a look at some online business courses, but they were too broad, and I am allergic to studying anything thats not actually required to achieve what I need to do – I just dont have the time for ‘padding’.

    So, flying solo community, have any of you been in this boat and managed to get out of it? Those of you who had no commercial background before building a successful small business, how did you skill up for understanding the (shudder) $figures$?

    Thanks

    Jim

    #1189362
    Dan Lawson
    Member
    • Total posts: 12

    Hi Jim,

    My business is fairly young like me, I’m only 21, so take my advice with a pinch of salt.

    Spend your energy in developing the skills you’re already good at, don’t waste your energy trying to learn something that you have already offloaded. If you have the resources to hire experts to do the work then keep it that way.

    In my situation I do most of everything because that’s who I am, I’m a bit of a generalist and I love to learn. But, I know that I will not be an expert in most of the tasks I do and I’m happy focussing on the skills that I am good at.

    Save time and energy, stick to what you’re good at and stay true to you. Don’t waste any resources trying to learn the numbers when it seems pretty clear that it’s not going to get you a worthwhile return!

    Hope that helps :)

    #1189363
    16k_zx81
    Member
    • Total posts: 43

    Hi Dan

    Thanks very much for your reply. I totally get what you are saying and can tell you and I have a very similar approach.

    The thing about the numbers is, though, I think there *is* potentially a lot of return in me learning how they work, mainly because I am so bloody useless at understanding them.

    Seems to me when I talk to other business people they just ‘get’ this stuff in a way that I dont. Its really a skill deficit that I think is costing me money due to just plain old garden-variety ignorance.

    So thats what I want to fix. Im just not sure how to go about it ‘efficiently’ and without wasting a lot of time…

    Jim

    #1189364
    Dan Lawson
    Member
    • Total posts: 12

    That’s a very good point Jim! Just don’t ruin yourself and be realistic about how much you’re going to be able to learn before you neglect anything else important.

    Maybe a short course is the way to go? Potentially a certificate in business accounting, or bookkeeping or something along those lines.

    From what I know you could do a night school and the time commitment wouldn’t be too sever! Alternatively, you could look to something like Lynda.com, it’s a great platform for learning new skills, I’m pretty sure that there’s some content on business accounting etc.. These might be a good place to start!

    Dan

    #1189365
    Johny
    Member
    • Total posts: 840

    Jim, I have seen these discussions before.

    I always find it quite interesting when I hear these types of comments.

    I know nothing about numbers so I’ll hire a book keeper. And yet, in my line of work, I always hear, tell me how to do it for free because I’d rather do it in a half hearted way than actually pay you to do it.

    My view is that knowing the numbers in your business is so important. And I agree with your comment that not knowing may be costing you. Doesn’t mean though that you need to be at accountant skill level to understand, and doesn’t mean you have to take on the workload of doing all the bookwork. But you do need to have some understanding.

    I am less of a fan of formal classes than I used to be simply because I feel that they just regurgitate theory. That in itself is not a bad thing to at least understand the meaning of things.

    But from a business perspective, it is about knowing that if I do this it costs so much, but if I do this instead it may save me a few $, or if I don’t do this it may impact my profit because…..

    If it was me, as a first step I’d be sitting down with the book keeper and going through the details with them. A good book keeper will work with you, and if not, get a new one.

    Haven’t got time, means you aren’t really interested in doing anything about it. That time is an investment in improving your business, not a burden.

    #1189366
    16k_zx81
    Member
    • Total posts: 43

    Thanks Johnny… I take your point that I need to spend some time, and I think I was clear that thats on my agenda as a priority, just that the use of time needs to be efficient, hence the nature of the q.

    Particularly interesting though, is your comment about sitting with bookkeeper. Strangely, I had always thought of her as someone at the other end of the accounts, and had never thought of her as a ‘consultant’ as such. That said, she is uniquely qualified to commment as she has been doing the books for me for years and knows my business in some reapects better than anyone, so following your advice, I have phoned her and will try to set up an appointment to discuss.

    Cheers

    Jim

    #1189367
    Dave Gillen – FS Concierge
    Keymaster
    • Total posts: 2,543

    Hi Jim,

    You’ve expressed a desire to “understand the numbers” and by all means sit down with your bookkeeper etc, but your interest isn’t really in numbers right? You just think they can help you get X. If you can get clear about what X is, there may be a more direct approach than studying up on accounting.

    For example would you like to increase your margins, be more profitable, outsource/automate/streamline, sell your company, something else?

    Knowing the answer will do two things:
    1) Allow you to find a specific course (or book/info/coach/etc) to get you to your objective directly with things you can apply to your biz immediately. A pricing course or cashflow or automation or growth or expansion or sales or whatever.
    2) It gives you a specific conversation to have with your bookkeeper/accountant. E.g. How much would I need to raise my prices to increase my income by $20k (or to afford an assistant, or whatever your goal is).

    Hope that helps. :)

    Dave

    Dave Gillen - Client Acquisition | Brisbane | (07) 3180 0288
    #1189368
    GuestMember
    Member
    • Total posts: 318

    Yes, I am in that boat. Strangely, I got a triple first in statistics on my psychology degree, yet I’d failed my maths at school twice and only got a C at college. It transpired that I can do maths but I’m slow and perform badly in exam conditions. In business I have little time, too. That’s where an accountant who is willing to provide advice proactively is invaluable. No good just reflecting on what has been.

    The late Anita Roddick, Founder of The Body Shop said she “I can’t see the light at the end of the tunnel when looking at a profit and loss sheet. I am in ideas”.

    Play to your strengths. Business owners contend with all sorts. Richard Branson has dyslexia.

    #1189369
    16k_zx81
    Member
    • Total posts: 43

    haha thanks Paul, Dave … its funny you should mention the accountant situation. My guy has just hit me with a bill for almost $4k for last fin year’s tax return – this is for figures that had been pre-processed by our bookkeeper before they were provided to him.

    His idea of service provision is to communicate almost exclusively by email, and I dont think he has ever offered to ‘assist’ me with any free advise or suggestions about how to improve things.

    So in light of that I think I might start looking for someone new. Yes, it does seem that if I can build a decent relationship with an accountant that might actually get me part way to where I need to be without having to spend a lot of time that I dont have, trying to fit in additional study

    Good suggstions :)

    #1189370
    GuestMember
    Member
    • Total posts: 318

    You’re welcome. As with any industry, some accountants will be proactive, some reactive (they’re very helpful as long as you prod from time to time), etc. All shapes and sizes!

    Why not try for some suggestions on here? Post in http://www.flyingsolo.com.au/forums/index.php?forums/need-a-resource-got-a-good-referral.20/

    #1189371
    bb1
    Participant
    • Total posts: 4,485
    16k_zx81, post: 222421, member: 33692 wrote:
    My guy has just hit me with a bill for almost $4k for last fin year’s tax return – this is for figures that had been pre-processed by our bookkeeper before they were provided to him.

    Have you actually asked him why its so much.
    I used to have my books done by a book keeper, and my accountants fee’s were high, I actually spoke to him (you know pick up the phone), and asked why. The answer from him was that what he was getting from the book keeper needed extensive re processing. When I started doing the books myself, the accountants bill drop significantly. Everybody says get a book keeper, but the number of small business’s I work for, who have in sourced their book keeping tells me something about the book keeping business. Ok that’s my rant for the day.

    And yes you can have the best accountant and book keeper, but as a business owner it is still important that you understand the numbers, you cant rely on them to be 100% committed to your goals and requirements. You do need to understand.

    And I have no idea what the analogy about dyslexia has to do with this. Dyslexia – a general term for disorders that involve difficulty in learning to read or interpret words, letters, and other symbols, but that do not affect general intelligence.

    #1189373
    16k_zx81
    Member
    • Total posts: 43

    And I have no idea what the analogy about dyslexia has to do with this. Dyslexia – a general term for disorders that involve difficulty in learning to read or interpret words, letters, and other symbols, but that do not affect general intelligence.

    I think thats actually the point that Paul is making; play to your strengths, augment your weaknesses. (thats how I read it anyway).

    Yes I have discussed with accountant. Thankyou for your suggestion.

    #1189374
    GuestMember
    Member
    • Total posts: 318

    Yes that was my point Jim. It was a supportive comment that you struggle with maths, as did Anita Roddick, and many other business owners have various disabilities where they need support, incl. Richard Branson. In his case, it’s dyslexia.

    Bert, as a former psychologist, I’m well aware of dyslexia, and crucially, I don’t remember anyone making any comment about intelligence. Take it easy and consider just stating your own thoughts peacefully rather than standing as arbiter of whether someone else’s points are relevant to the discussion. That really isn’t your role here and I’ve seen a few other people doing that. It really isn’t endearing and makes me wonder if that’s why some less assertive people don’t contribute. We’re all just acting in good faith to add value to people’s lives and businesses.

    #1189375
    bb1
    Participant
    • Total posts: 4,485

    Paul,
    I guess because I know some people who suffer from dyslexia, who have gone off to their health care professionals, and are told that Richard Branson can do it why can’t you. I suppose my concern at a comment like that is I have seen the damage those kind of comments make to people who do seriously have issues with such comments, and haven’t being able to achieve what Richard Branson has, but are being constantly compared to him.

    I leave the discussion there..

    #1189376
    GuestMember
    Member
    • Total posts: 318

    That’s a valid concern Bert (about comparisons to him in the population generally, actually). I often express it myself. But it’s just as ‘damaging’ if we must use strong language for people to hold self-limiting beliefs. Therefore, I usually settle for individual human ‘potential’.

    The context here is someone who is finding the maths awkward. I could find some people who had done moderately well, such as some of my coaching clients who have dyscalculia. But no one would know who they are and it would break confidentiality. And that’s why, sometimes irritatingly, people talk about Branson this and that so much; someone we all recognise.

    So how about being kinder in our discussions and also being more open about our motives? You didn’t express that at all above. Instead you introduced something about intelligence that wasn’t there in anyone’s original text and then had a pop at it out of nowhere.

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