I have been assisting businesses for some time now and the truth of the matter is that depending on how creative the owners or their accountants are, they can make the business look like a shiny diamond in the ruff. This is done without telling a single lie or making “mistakes”. It is simply done by using accounting tools in a manner that they were not exactly intended for or by projecting figures based on completely irrelevant, but accurate facts. These are things like “Provisions, future value, write 0ffs and creative allocations”. All this now gets carefully entered into Excel Sheets with pretty graphs and pie charts that leave investors drooling all over the boardroom table.
Back at to reality and there is not even enough cash left for this week’s wage run. The other fable about projections and reports are that far too often business owners and managers spend too much time in capturing “results” or calculating “targets” that they completely lose touch with reality. The mass amount of time spent on creating and presenting these reports could have gone into actual effort to generate a profit. Business owners then very seldom compare their results from targets and projections to reality. I mean what would be the point; we all know it’s just projections and we can’t expect them to be accurate.
The truth of the matter is that sometimes you need to look at the results as they are what pays the bills. Spend less time on projections and budgets and more time on generating profits. Without profits no matter how pretty and colourful your charts and sheets are, eventually reality will catch up with you and your business will become another statistic of businesses that did not make it.
Chief Operating Officer