You may look at a balance sheet or profit and loss and get that sinking feel, I know a lot of people who do and this is not gender specific. The finances of a business tell a story with a beginning, middle and end, for those people that find numbers difficult to read, you are not lacking in abilities you have not being given the code.
Understanding your own personality type will help you to understand your preference in receiving and expressing information:
- Driver – Fact-Based Extrovert
- Analytical – Fact-Based Introvert
- Amiable – Relationship Introvert
- Expressive – Relationship Extrovert
If you are major analytical type you have a preference for facts and figures and so a balance sheet will be less daunting. You may not have been taught how to read it but you will not have an aversion to it but you may be curios to learn. If you are an expressive type you would be more dismissive of financial requirements and value people relationships in building a business.
In my experience in working with SMEs it is shocking how many business owners have an unhealthy relationship with the numbers in their business, when the numbers are a critical guide to the health of the business. The numbers of a business is like the dashboard of a car, you need to understand how to read the speedometer, the fuel dial and the warning lights etc…to get to your destination without running out of fuel or breaking down on route.
In order to grow a business it is crucial to understanding basic accounting, to get regular management reports and to analyse the business in terms of sales and marketing and variable cost.
Do you understand your numbers?
It is frightening how many business owners’ think cash is profit, or that money in the bank means the business is profitable. Being able to read the numbers of the business allows the business owner to regularly measure the path. This creates opportunities to modify and improve the numbers while the business is in progress so ensuring the desired destination is reached.
If you understand your personality type, you will understand that you are not useless with numbers, amicable and expressive personality types need to understand the relationship and relevance of the figure, i.e. what does it mean to my people? What can I express with it? What opportunities will it create? How does it explain this unique situation?
Numbers express a story so it is important that the story is expressed in a way to engage the senses of the business owners that need to understand and use them.
Take time to understand your personality type and then find an accountant who can express the story in a way in which your personality can understand. Remember it is not you, it is the way you tell it.
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