Some things, I just don’t know.
And until someone tells me.
I don’t even know that I don’t know them.
Consider, for example, something boring and mundane–and no, not accounting!
Consider, for example, winter tires.
Stricken by a certain irrational frugality, I tried switching out my winter tires.
I got everything ready, jacked up the car, took two winters off. And installed the summers.
No fuss. No muss.
The other two, they wouldn’t budge.
Turns out they were rusted on.
I never knew that rust could act so compelling on winter tires.
And I certainly never considered that possibility.
In short, I didn’t know that I didn’t know.
Now I know.
(And I also know that, next time, I’ll pay my local mechanic to do that job for me).
I know, I know… OK, maybe I don’t
Next week, I’m teaching entrepreneurs about cash flow. We’re going to talk about things they don’t know.
And we’re going to find out whether, some of them, don’t even know they didn’t know.
Something like this for example.
So we’re going to use something they know—Monopoly
To teach them something they didn’t know they didn’t know—in this case, the difference between profit and cash flow.
Which is all well and good.
But we’re also going to move on to other areas.
Areas they also don’t know.
Except that, this time,
They probably know they don’t know.
Something like this, for example.
Yeah, you got it, financial statements.
What’s interesting about financial statements is that most entrepreneurs don’t know how to interpret them.
And what they do is fake it (pretend they do understand).
Or break it (essentially shut down, ignore their existence).
And that’s a problem.
A big one.
What I tell everyone at my workshops, and what I’m telling you, is that…
It’s OK to know you don’t know anything about financial statements.
It’s OK to not know what a balance sheet does,
Or what a P&L says.
It’s OK to know you don’t know everything about financial stuff.
What’s not OK though is to not let on that you don’t know.
You’re an entrepreneur.
You’re not an accountant.
And there’s accounting stuff that you simply don’t know anything about.
And that’s cool.
What’s not OK though is faking it or breaking it.
Not cool. Not cool at all.
Because those financial statements are important.
And to any entrepreneur.
Because financial statements tell you where you’ve been…
So that you can plan where you’re going.
(Corny analogy warning)
If you imagine your company as the USS Enterprise,
Then the financial statements are the ship’s log.
Which you’ll eagerly refer to the next time you want to know whether it’s safe to beam down to the planet Profiteria
(Hey, I warned you about it being a corny analogy).
You get that financial statements are important?
Now, there’s one other thing you need to know
Those financial statements…
Reading them is easy to learn.
Ask your accountant to teach you,
Attend (ahem) a seminar or workshop.
And then, you too can bask on the lovely planet of Profiteria.
So there you go.
Now you know