Hot Topics, Cool Solutions 6: Financial Reports, And More
To send Al your own questions, which if selected will run anonymously, send him an e-mail at email@example.com or fax him at 212-202-6275.
This column is meant to be a resource only. Please check with your own trusted business advisers, including your own attorney, to make certain that the advice here complies with all relevant laws, customs, and regulations in your area.
I get a financial report from my accountants and, when I ask questions about what the items mean, they give me another accounting term I don't understand. It seems that their numbers are different than what is reality. Why?
And, what do I need to know to run my company?
Dear Numbers Man,
My friend Ellen Rohr wrote a great book called Where Did the Money Go? - Easy Accounting Basics for the Business Owner Who HATES Numbers! and I recommend it to all my clients because it is the best plain-English book about accounting. She explains what those accounting terms mean without using other accounting terms. And, she explains that there is a big difference between the accounting approach an accountant uses (designed to delay or minimize taxes) and real-world accounting (what you need to know to operate your business profitably.)
There are key numbers and reports you need to watch at least monthly. The best companies look at these numbers daily, weekly, quarterly, and yearly as well.
I'm overloaded by running the business, but there is so much to learn and I know the secrets to success lie in reading and attending workshops. Do you have any recommendations on how to maximize my time?
I understand that it takes all our time and energy at times to work in our business, let alone find the time and energy to work on our business.
What I would do is skim the trade magazines for articles of interest and then cut them out and put them in hanging files. Each file should be dedicated to a subject like finance, marketing, operations, leadership/management, and staffing to name a few. Then, I would book time in my schedule to read several hours a week.
It takes discipline but it's worth it, because it makes all the difference. Make it a habit to read one to two hours a night. Yes, it will mean you'll have to skip collapsing on the couch in front of the TV and watching Sports Center until you drift off to sleep. But this little bit of work will pay off with some big plays of your own.
Here's a quick tip ... avoid reading business books that are more than 150 pages. If they can't say it in fewer pages than that, I don't think they really know their own message.
Al Levi of Appleseed Business specializes, as his Web site says, in "Making Contractors' Lives Less Stressful and More Successful." Through interactive workshops, on-site assessments, or long-term consulting, Levi delivers the benefit of the experience he gained from years of operating a large family-run HVAC and plumbing business. Learn more by visiting www.appleseedbusiness.com. You may also contact Levi by e-mail at firstname.lastname@example.org or by fax at 212-202-6275.
Publication date: 08/09/2004