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Be the most stupid person in the room

Blurred sunset in the background with a ladies arm from the elbow to the hand in the foreground. Overlaid on this is a line drawing of a brain in white and lots of line drawings of shapes above this.

This took guts.

I was in a meeting with a potential client, where we were running through some of the key ways in which we could help them. When I mentioned management accounts, the company owner interrupted me…

“Garry – let me stop you right there. Can you explain to me what management accounts are?”

Given that he was running a business employing 30 people, this was a brave thing to ask. I admired the fact he was prepared to admit he didn’t know – and was prepared to learn.

I suspect he’s not alone, and that many of his peers don’t know what management accounts are, either. If that’s the case for you, too, it’s not your fault. Unless you’ve previously worked in an environment (usually corporate) where management accounts are the norm, why would you know what they are?

The problem is that too many business owners are reluctant to admit these gaps in their financial knowledge. When you’re the person in charge, it can feel uncomfortable.

As a result, they never ask the right questions; never get the answers they need; and leave both themselves and their businesses vulnerable.

When there are gaps in your financial understanding, important financial issues get overlooked. This can cause financial issues in your business, and it’s distressing – and dangerous – when you’re not sure why they’re going wrong.

So as we start the new year, I’d like to encourage you to be like that prospective client of ours. Ask as many questions as you need about the financial aspects of your business…

…even if they’re basic and even if you suspect they’re things you really “should” know.

As the fantastic business author Simon Sinek once put it: Be the most stupid person in the room!

I highly recommend this short video, where he explains how he frequently asks questions about subjects where he is not knowledgeable…

…and often discovers that all the high-powered people in the room with him are relieved that he’s asking, because they don’t understand the issues either. (They’re just embarrassed to admit it publicly, at least until he breaks that taboo.)

“There’s a lot of value being the idiot,” he concludes…

…Although of course, the person asking the questions isn’t the idiot at all. They’re actually the smart ones who get the information they need to move ahead, while everyone else remains ignorant.

Here at Insight Associates, we love clients who ask lots of questions because it shows they’re engaged.

Plus, answering their questions about financial management is key to what we do. We fully understand that even owners who have built excellent businesses, with outstanding business skills, don’t always have great financial skills. And that’s exactly the gap we fill.

‘Standard’ accountants just throw numbers at you towards the end of the financial year, and leave you to work out what they mean. (Most business owners never do.)

But we’re here to make sure you understand the financial side of your business in depth, are fully comfortable with your numbers and can use them confidently to make better business decisions. And that means spending as much time as necessary with you, often talking to you and your team daily, and answering all your questions.

Over the next few weeks, I’m going to be explaining exactly what management accounts are and how they help you run your business better. (Don’t worry, I’ll make it interesting.)

But if you feel ready to upgrade your financial management, and enter into a true partnership where we work closely together to:

– Professionalise your financial systems

– Develop a crystal-clear understanding of your company’s finances

– Use that information to maximise your profitability and grow faster…

…then please get in touch with me today. Simply email or call us on 01279 647 447 to arrange a no-obligation chat.

Warmly,

Garry

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In this blog archive our Managing Director, Garry Mumford simplifies all things financial and shares with us a lifetime of practical financial business advice.

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