I Have Started a Business. What Do I Do Now? Passage Two | Business Networks
Chapter One, Passage Two, From 'Accountability Through Transparency.'
Somewhere in the business cycle every owner has the experience: I don’t have the answers I need. Where am I going to get them?
When I started my first business, I had the same experience. What drove me the craziest was getting opportunities to grow the business, then doing more volume, but always being painfully short of cash. I started my construction business with no money and the goal was to put all of the profits back into the company. It took the painful realization that not every job would make the desired profit that had been bid. Having majored in chemistry in college, I was very slow in the finance department. I had based my entry into the business world on being told “do good work and everything will be OK.” I soon found out that that was a lie. In fact, a lot of people had gone broke operating on that very premise! I started looking around for help, reading books and trade magazines and talking to people. As the business grew, it required even more money to make it work and the more urgent the desire for help became. After joining my first trade association, entering their job competition and winning “National Contractor of the Year,” I thought I was pretty hot stuff. I started going to trade shows and asking questions. Typically, people gave answers quite freely. After a while I realized that some people didn’t know that they didn’t know the answers and others didn’t know but would not admit it.
I came to the following dilemma: how do I know what to do when they are lying to me and lying to themselves? Several people asked me to teach seminars. Even though I was a teacher, I kept asking questions. I finally realized that no one I knew had all the answers. I decided to start calling people that I had read about in magazines and ask them questions. A few of them impressed me as having some knowledge that I needed. I then asked them to come to my office and look at my accounting books. The goal of the first meeting was to create a safe place to talk and generate a trust relationship. I later came to realize how critical safety and trust are to owners. Most employers ask their employees to give them open and honest feedback. The irony is that employees are afraid that if they did that, they would be fired. Another issue is that they don’t have any skin in the game like an owner does. As a result, most of them just want a job, a regular paycheck and no away-from-work responsibility. They do not give the employer any helpful feedback.
At the end of the first meeting I proposed that we meet regularly together and compare each other’s financials and talk through the difficulties of our businesses. They agreed to try the idea out. One of our hot discussion points involved who had the better accounting system. After two years of “my accounting is better than yours,” we created a comparison list with definitions. Everyone took their numbers and put them in certain categories so we could compare. Additionally, everyone had to provide the others with their last two years of financials and their current partial year. If we didn’t understand something we could go straight to the financials and understand. We developed a non-compete, non-disclosure (NDA) agreement with very large legal teeth that everyone had to sign. Period. No sign, no play.
From there we started to learn what it really took to grow a business profitably. I began to experience the power of peer networks. I went on to run a business (Business Networks) that utilized this unique framework to help other businesses grow. Over the past three decades, I’ve worked with a diverse set of companies, from big to small and in various industries. From $30,000-a-year to $120-million-a-year companies, the problems are most always the same.
This passage is taken from Les Cunningham's book, 'Accountability Through Transparency.' Subscribe to the Business Networks' news releases Here to continue reading this and other industry related content. Contact Business Networks Here to purchase a copy of 'Accountability Through Transparency' or to inquire about membership! Learn more about Business Networks at http://www.businessnetworks.com.