Happy New Year all. I hope you had a great holiday if you managed one.
Fresh for a new year and, like most people, with eyes on goals for the year I thought about why people take so many risks to run a business. The simple and obvious answer, and therefore probably wrong, is that people do it for profit.
“Money may not buy happiness, but I’d rather cry in a Jaguar than on a bus.” ― Françoise Sagan
Of course the main reason humans take risks is to achieve things but mostly purpose. Darwinian progress etc.
Something happened the other day that caught my notice. A small thing but I think interesting.
My favourite accounting system, Xero, resigned the menus on the software. They split the main menus between “Business” and “Accounting”. There isn’t much on the “Business” menu, issue invoices, pay bill, but many things in the “Accounting” menu. To keep it as simple as possible for the non-accounts out there. Understood. But the “Accounting” menu includes the Profit & Loss report. How are you supposed to run a business if you only know your profit once a year?
This isn’t a criticism of Xero in any way. Their main target market is accountants both in-house and public. And of course its brilliant software.
Nevertheless it trigged a sigh from me. Folks it’s ok to outsource your housekeeping, your ironing, and maybe even raising your children via Switzerland, but you have to own your profit. All business owners need to be able to jump into the software and run a P&L. Know how to drill down to see what’s coming and going.
And forget the cash is king stuff, cashflow is always a response to profit over time.
Maybe I should run familiarisation tours for entrepreneurs?
I wish everyone a satisfying and purposeful year, with you hopefully getting to own some profit.