If you want to be successful as an entrepreneur and a small business owner, you need to know two things: 1) How to use Excel; and 2) How to plunge a toilet.
Both are metaphors. Excel is about understanding how all the parts in your business come together and then purposely using that information to make responsible decisions. It means being able to play out lots of scenarios and what if’s so that you are utilizing your resources in the most profitable way. Plunging a toilet is doing whatever it takes to get the job done – even if the work is not pleasant and even if it gets your hands dirty in the process.
It doesn’t matter what type of business you are running. If you want your efforts to be successful over the long haul, then these rules are practically unavoidable.
I know this is something not everyone may like to hear or even agree with. From time to time, I have conversations with people in corporate jobs who tell me they are thinking of starting and running a small business. When I bring up these two points, I get responses like: “I don’t need to know Excel, I have a controller for that,” and “If the toilet is clogged, I’ll just call a plumber.”
Occasionally, our clients adopt a similar attitude when we begin our work together. They may be hard workers, smart people passionately committed to their businesses. But when it comes to things like record keeping, financial reporting, risk analysis, and inventory management, they instinctively shy away. Some bury their heads in the sand and ignore those areas. Others just quickly pass off these responsibilities to the nearest expert with the thought that they have other, more important things to worry about.
Neither strategy is very good. Here’s why:
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- The need for good record keeping, financial reporting, risk analysis, and inventory management, etc. won’t disappear if you ignore it.
- Most experts and professionals out there can only offer assistance in a very specific area of your business. They’re not dealing with the whole picture.
- Most outsiders won’t understand your business like you do. They’re not as committed, either.
- Not everyone is going to tell you the truth about what needs to be fixed or improved.
If you are not personally involved in some way in the most vital areas in your business, then you will almost certainly miss out on the real opportunities to cut costs, maximize profits, and expand into new areas. If you don’t have good systems in place to monitor performance and test assumptions, then it will be extremely hard to make the decisions that are truly good for your business.
Now of course, I don’t mean that you have to be an expert in every area of your business or that you have to do everything yourself. As you grow, it’s okay to delegate certain areas of your business to others. Just don’t do it blindly and understand specifically what you are asking them to do, and what information you want to review monthly. You need to understand and verify the services, skills, and experiences, these people will bring to your business. You also need to know where to go when things aren’t working the way you want them to or when they break down completely, meaning, you don’t have to do what they do everyday, but you have to understand the systems and tools that are the foundation of the work.
If you really want to start a new business and be around for the long haul, then it’s not enough to be passionate about what you do. You must internalize the two metaphors above. You need to have the systems and processes in place to make the right decisions – even if those decisions aren’t always so easy to accept. You have to be willing to figure things out and get your hands dirty.
If you won’t do it, no one else will.