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.
But,
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.

So…
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.

Listen now.
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.
That’s fine.
What’s not OK though is faking it or breaking it.
Not cool. Not cool at all.

Because those financial statements are important.
To you.
And to any entrepreneur.
Why?
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).

Courtesy of shirotgusu

OK?
You get that financial statements are important?
Great!
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,
Or,
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

It only comes once a year.
No, it’s not Christmas.
Or anything like that.
This thing that comes once a year.
This thing I’m talking about.
It’s training.
Free training

Training aimed at you, the business owner. The office manager. The entrepreneur.
Or, maybe you’re running a non-profit or a charitable organization. And your staff needs training.
Whatever your needs. Wherever you’re at.
If you need training.
This is the time to do it.
Training.
For you.
For your staff.
Absolutely free.
Only in May.
To register, or for more information, just click here.

June saw us wrapping up a successful seminar month. The final session, the one called Cash Rules! raised an interesting discussion. A discussion about words that no self-respecting CEO or E.D. should ever use. Here, let me explain…

The conversation, it was getting heated.
It was a quarrel. A brouhaha.
It was all of that. Because of one silly word.
The word rich.

It was two people talking about an acquaintance—a third person not even present—and arguing whether he was (or was not) rich.
One person, the one taking the affirmative, saying, “Yes he is rich! He has money! Lot’s of it!”
The other, the denier, complaining, “Aw c’mon! How can he be rich? He has a normal job, no better than yours or mine.”

I sat back and watched. Enjoying the show; adding nothing.
All the while wondering whether either one, at some point, would pause and reflect.
And lay down some ground rules.
The first rule, the essential one, being, Hang on! let’s stop for just a moment, and let’s define that word, “rich”.
But no one did, and the debate ragged on, until I lost interest.

They’re big words, weighty words, important ones. They’re used every day, by a lot of people.
Rich, money, success, wealthy
And yet not one of those words—not one—has a clear meaning.
What they share, though, is a subtlety of interpretation. They mean different things to different people.

Like the end of the rainbow—and its mythical pot of gold—those words are hard to pin down.
And like that pot of gold, we all dreamily envision their fulfillment—ah, one day I’ll be rich! Oh yeah, I’ll have money. I’ll be wealthy and successful!
And then most of us, all too sadly, decide that money and wealth and success, just like the end of the rainbow, are easier to talk about than to attain.

You know what’s funny about those words? Those words like money and wealth and rich? There’s a word for them. Yeah, I’m serious.
And that word is nominalization.
Nominalizations are abstractions. You can’t pick any of them up and put them in the trunk of your car. They’re intangibles. They describe something vague, something fuzzy. Something mythical, almost.
I was going to say they’re like a unicorn. But that would be wrong. Because, we all know what a unicorn looks like, and we all know it doesn’t exist.

But rich people, successful people? Oh they exist all right. And some of them might (or might not) be your sister, your neighbour, your friend.
And that’s all well and good. Debating the wealth of a common acquaintance. That’s all well and good.
And harmless too.
Nominalizations, in casual conversations, are pretty harmless, so long as no one starts flinging mud. Or throwing furniture around.

But let me tell you where I take exception. Let me explain where nominalizations don’t belong.

In your organization!

Business owners! Executive Directors! Please tell me. Do you ever say?
When we have money, we’ll hire another employee.
Or
When we’re successful, we’ll move into bigger space.
Or
We can’t compete against them, they’re richer than we are.

If you do use words like that, please consider, what do they mean?
What does it mean to say, When our organization has enough money?
What, exactly, is enough money?

What I’m getting at is, you cannot drive an organization with nominalizations.
Organizations need objectives, solid goals, hard targets. Actual numbers.
And your job (well, at least one of them) is to set those numerical targets, communicate them, make them real.

My message, in fact, is simple.
Don’t chase rainbows. You know, as we all do, that that pot of gold isn’t there.
Establish a revenue target, a cash-flow target, a bottom-line target.
And then,
Write those numbers down, make them visible, make them crystal clear.
And then,
Financially manage your organization with those targets front of mind.

As for nominalizations,
Well, just for fun, ask your neighbour whether she thinks your other neighbour is rich.

To learn more about nominalizations, check out my book here. If you’d like to learn more about the Cash Rules! workshop please click here.

Let me start by saying that I hope the first four months of 2012 were as busy for you as they were for me. It’s been a flurry of non-stop activity, with constant consulting, teaching and writing projects from early January right through to late April. And then, of course, there’s tax season.

For many, tax is a four-letter word. But, as mentioned elsewhere on my site, to accountants, tax is somehow enjoyable. In a weird, arcane (and perhaps masochistic) manner that I can’t begin to describe.

Anyway.

That was then. This is now. And, if you’re a soon-to-be (or relatively recent) entrepreneur, here are a few items that you will want to consider.

With my colleagues over at the Entrepreneurship Centre, I’m providing, on May 16 and May 30,  low-cost, half-hour consultations. To learn more about these one-on-ones, just click here

Then, starting on June 5th, we’re hosting our informative, half-day QuickBooks and Cash-Rules! sessions. AND! Because these are the last QuickBooks courses until the fall, they are absolutely free. Now there’s a price you can’t beat!

Of course, if you’re an established organization (whether non-profit or business) and you have more personalized, more catered requirements. Please get in touch. I’d love hearing from you.