Know your Numbers (and why Volunteering is Great)

Know your Numbers

It’s 9pm. I’m staring at a nightmare of numbers desperately searching for meaning. I’m wet, it’s been raining on us out on site all day, I’m sore from carrying metalwork and floorboards over the boggy ground, I’ve been cried at by a bride worried about the weather and I just want my dinner, my bed, and maybe a hug from my mum.

This was me in 2006. I ran a marquee company, we were turning over about half a million quid and business was, in the main, bloody brilliant.

But accounts were my sworn adversaries. They were enemies to be slain, to be fought into just good enough shape that I could keep the government happy and avoid jail. Gross profitability projections, cashflow forecasts and management information were just words that other people used.

Then I secured a place on Goldman Sach’s 10,000 Small Business programme. My worldview changed. Firstly, I realised I was not alone and secondly I realised that these mortal opponents were actually savants in disguise.

Instead of attacking the accounts, I should be embracing them. Instead of hiding from them I should be inviting them in for a cup of warming herbal tea.

To be a good entrepreneur and to run a successful business you don’t just need to know your numbers, you need to be closer to them than you are to your best friend.

You need to have up to date figures and you need to not just look at them but truly understand them. The first step is to change your attitude towards them. Be interested in them and be interested in the process of them being produced. Financial accounts are like risk assessments, the finished article is only 20% of the value, the other 80% lives in the process of producing them.

This isn't necessarily easy. To start with some of it will be counterintuitive. Why does money coming out of my bank account need to be credited on the balance sheet? Why on earth do I have to declare VAT on imported services as if I had sold something? Is this customer a debtor or a creditor? What do you mean an LLC is a pass through entity for taxation purposes?

Add the fact that in most companies, of all sizes, finance processes are a mess. They have a wild amount of lag built in, they are clunky and people hate them.

But if you invest the time and energy into getting everything into shape and actually start reading your accounts in the same way you read other business information then you will reap huge rewards. You will have a comprehensive scorecard of performance, you will have a tool for seeing the future and you will have an early warning system for developing issues.

And you are the best person to do this. As the owner / founder / CEO / whatever of the company you are the one that truly understands it, you have a great feeling for how it breathes and how it feels, when you combine that with in depth knowledge of where the money is pumping you will, truly, have a superpower.

If you practice enough, you will get very good at it. It’s not black magic. One of my most useful superpowers (although hyper-irritating to those that are on the receiving end) is to be able to look at a sheet of numbers and know when something is wrong.?

This has come from many years of understanding businesses and understanding their finances. In the past this has allowed me to cosplay as a financial crime investigator. I was sitting in a leadership meeting reviewing a month / quarter / I can’t remember’s worth of accounts.?

Chris: “We’re spending an awful lot of money on taxis.”

Meeting: “No, that’s just the client team having a lot of meetings.”

Chris: “Are you sure? That number is wrong. I’m confident.”

CFO: “OK, I’ll have a look.”

It turned out that one of our team had been the victim of a phone theft whilst coming out of a tube station. Their phone had been stolen unlocked and with the company Uber account tantalisingly available to the ne'er do wells. We had been the unwitting funders for the transportation of a North London drug dealer for several weeks. Oops!

How well do you know your numbers? If you need a hand, let me know.

I’m a Fractional COO, Facilitator and Finance Demystifier helping early and mid-stage startups and SMEs get a grip on their business operations to position themselves for rapid scaling with a focus on common sense and simple processes.

I help founders who are frustrated with the time they are spending on operating their businesses. I free up their headspace to focus on building their companies and not worrying about the day to day whilst giving them a better understanding of what is happening with both their people and their money.

Volunteer, it’s good for you.

TW: The below content contains references to sudden & unexpected death. It’s not as dramatic as I’ve made it sound though.

It was Friday lunch time 10 days ago that I found myself sitting on a sofa in an immaculately tidy flat in Windsor consoling the mother and girlfriend of a 48 year old chap who was lying dead in bed in the room next door. This wasn’t my first time doing this and it never gets easier. There is nothing to say. But there’s only so many times you can say there is nothing to say as an alternative to having something to say.

I’ve been a front line healthcare volunteer for about 18 years. I’ve worn lots of different hats in that time but it has all involved dealing with situations that most people, fortunately, very rarely see.

I can say, hand on heart, that I would not have achieved anything like the success I have in my career without the experience that volunteering has given me.

As a privileged 21 year old I had gone from boarding school to a gap year teaching in a prep school to a great university. Despite thinking I was pretty wise to the ways of the world it wasn’t until I started crewing ambulances answering 999 calls around the country that I really started to understand some of the struggles that people face. I learned empathy, I learned communications, I learned how to deliver bad news honestly but with kindness.

I also developed two mindsets that have served me extremely well in the world of business operations. Firstly, a robust approach to problem solving. If you have a patient who is stuck on the floor of their tiny bathroom on the 10th floor of a tower block with a broken lift and they have to go to hospital. Then they have to go to hospital. There’s no other option. The problem has to be solved and the problem can be solved. If you apply enough thought, enough focus and enough effort to any problem. It can be solved.?

Secondly, a sense of perspective. No matter how bad a business challenge gets or how difficult the situation is in a company, it’s almost never literal life and death.?

That’s not to diminish work challenges. They can be tough, frustrating, stressful, important, consuming and hard to solve but, because of my weird ass hobbies, I’m able to take a mental step backwards, remind myself that nobody is going to die here, and approach the challenge more calmly than I otherwise naturally would.

Aside from healthcare I’ve also been a school governor, organized my village fair, worked as a public advisor to research organisations and a host of other odd activities. All of them give me exposure to worlds that I would otherwise never be part of and a little inner glow of knowing I’m helping the world to be a better place.

So do it. Find some way of giving your time, skills and experience away for free. I promise you it will be a worthwhile investment.

P.S. In my case it’s also how I met my wonderful wife. I can’t promise you the same but you never know how these things turn out ??

P.P.S. I'm collecting these articles on my Substack .