Edition 538 – Wrong Numbers, Wrong Story

The reports are passed across the table to me. The financial year, just complete, summarised in 5 pages.

I look to the bottom line. Looks good.

Then I look up. Further up in the reports. To just below the top line.

“These numbers are wrong” I remark.

“What?” comes the reply.

“These numbers are wrong” I repeat.

“How do you know?” replies the business owner.

In front of me is a flipchart, surely my most effective tool of trade these days.

“What’s the number you keep telling me you’re achieving in your business?” I ask the business owners, as I scribble some details on the flipchart.

They throw a number at me. It’s the same number they’ve raised in our prior meetings together.

“Then why is the number in these reports, that number?” I ask. To clarify, there’s a very, very wide disparity between the number they’ve been operating to, and the number in the financial reports.

There’s two at the table. Plus me. They look at each other. Then, they look at me.

“What do you think the problem is?” I’m asked.

“Well, it’s either ‘A’ or ‘B'” I reply.

“You need to find out more, about what numbers are in these reports” is how I leave it at the end of the meeting.

It turns out I was right.

It turns out it was ‘B’.

I spotted that in 90 seconds. 90 seconds to tell a business owner, the reported numbers are nowhere near right, and are not telling the right story about the business.

Truth be told, it’s taken me almost 40 years to spot that in 90 seconds, but that’s the power of crystallised intelligence at this stage of my career.

The numbers have now been corrected. To what they should have originally been. It’s now a vastly different story to what was originally reported. Vastly is an understatement, actually.
Most small and family business owners don’t place great stock on their business numbers, except for the bottom line. Well, add to that, the size of the bank account too. They certainly place great stock on that!

Most small and family business owners don’t ask questions about their numbers, simply for the fact that, by and large, financial reports are a bit of a mystery to them.

That’s why there’s a quest on. To help people better understand their numbers.

For when they better understand their numbers, they better understand the path they’re on, and whether it is the right one, or the wrong one.

Whether it’s telling the right story, or the wrong story.

This Week’s Tip

“Numbers are reasons in disguise – and it’s about time to remove the disguise.”