AI Magazine Issue 12 2018

66 Acquisition International - Issue 12 2018 I wonder how many people who have the passion and excitement to start their own business actually have natural skills for the financial aspects of being a business owner? can tell you from my own qualitative assessment that ‘very few’ would be my answer. The 20 years that I have been a business owner myself (as well as supporting the needs of other business owners) has definitely proven to me that financial skills are few and far between when starting a business. Where do people turn to when they need these skills? Often far too embarrassed to admit it, many people work it out for themselves, but many don’t. Running out of money is a reason for so many business failures – however, as I learned when running a business through the dotcom era of madness, cash flow can definitely keep a business afloat. Our CEO was excellent at it; it was his ‘problem’ and it wasn’t until it became my problem that I had to learn how to properly manage money. I asked a community of small business owners: “Do you know what cash flow is and how to manage it?” I then had over 100 requests fill my inbox for a copy of my cash flow template, with many admitting that they just managed from day to day with their income and their costs. Financial skills in start-ups and business owners – cash flow is the king of skills I Before I begin to sound like a smug and irritating business owner, let me tell you that it was years before I understood cash flow, and once I did I made friends with my business in a way that I had never done before. To me it had a colour, a shape and an emotion that was very different to the colour I gave it when I marketed or delivered against the sales I achieved. Its colour, shape and emotion reflected how I was feeling – worried or joyful. It also focused my attention on sales and my supply chain. Money was a monster to me; sometimes it was a friendly one, sometimes it was one I feared. It was always lying under my bed at night and occasionally I could hear its soft breathing, but often it was growling and keeping me awake. Once I learned cash flow, I could look the monster in the eye, say ‘night-night’ and put it to bed. In the morning, I would put its lead back on it and it would be under my command for the rest of the day – I was in control. Back to the earlier question ‘where do you go to learn this skill?’ – not your bank that is for sure, and even accountants rarely help you. When I asked a number of business people how they learned when they were first starting out, they resoundingly said “from a friend or family member” – someone who had walked this path before them. I beat the drum for this fundamental skill. It is not a hard one to understand when shown, but it is the difference between survival and failure. It is also (and this really matters) the difference between being able to sleep and manage your emotional and mental wellbeing. When you can project forward six months with all your fixed costs in place and your booked sales, you can see that your business will be okay or that it won’t be. It both guides and protects you and others. I have now taught my three children how to manage a cash flow before they even own a business. Even managing university loans and costs are helped by this skill. So, let me finish by saying that you should help others if you have this skill and get help if you need it. Do not be embarrassed – I have helped very highly skilled and respected business people learn this. If it isn’t something you have needed in the past, then how can you expect yourself to know and understand it? About the author: Penny Power OBE started leading conversations in business wellness in 1998 when she founded the world’s first business online community, Ecademy. She has been a business owner, speaker and writer for 20 years. She was awarded her OBE by the Queen in January 2014 for her contribution to Entrepreneurship in the Social Digital World. Penny’s latest book, ‘Business is Personal’ launches in 2019. In the book, Penny discusses the importance of us holding onto our own beliefs and definition of the life we want to lead and live, in a world of ‘comparing and despairing’ that has been created by the overuse and dependence on social media. Penny boldly opens up about the trials of her own life and the observations she has of the way we are all being sucked into believing we lack, rather than having the confidence in our own values, skills and dreams. Penny is keen to ensure that business start-ups, self-employed, business owners and employed people are also guided and supported in a world of communication that not only impacts the mental health of teenagers, but very much impacts working adults.