It is Too Risky to NOT Know

I received a copy of a client’s financial statements and I was totally confused.  Margins didn’t make sense.  Months had skipped expenses.  The Accounts Receivable almost gave me a heart attack…that is until I realized it just couldn’t be right.  Talking to my client, he didn’t have any explanation except that accounting wasn’t his thing and he didn’t understand it.  The bookkeeper took care of that.

I was speaking to another client about his marketing plans.  He brought me a pile of brochures and ads that had been created.  He also proudly announced that he had outsourced his social media.  He was keeping up with it, whereas most small businesses didn’t.  I went and looked at his Facebook page and the only things posted on his page were articles going to other companies’ websites.  He didn’t have any content that was his or that led back to his site or projects.   And he had some pretty brochures, but he wasn’t sending them out or giving them to people.  He said he wasn’t a marketing expert.  That is why he outsourced it.

These same stories come up in all areas of working ON the business.

I don’t really know how to hire people and keep hiring the wrong people.
I am not a salesperson, I don’t know if the sales guy is doing it right.  That is why I hired him.
I don’t know how to deal with conflict so how can I blame her for losing it on that employee.  I probably would have also.

You may be reading this and feeling frustrated.  I thought all of the other 2 million blogs said to outsource what you don’t know.  Hire experts in the areas you are not an expert.  What is wrong with these examples?

Know Something About What You Don’t Know

I do understand the frustration and I have probably written about outsourcing and hiring experts, also.  The thing is you have to know something about what you don’t know.  You have to at least know what is possible or expected.  You should know what you need someone else to do.

The reality is that many people don’t know what they are doing either.  You have to at least be able to tell if the person you have hired or outsourced to knows what they are doing.

What does that mean?

1. Get involved in reviewing what they do. Review reports regularly to look for inconsistencies and trends.  Ask your social media person questions.  Review the activity on our platforms.  Don’t let your lack of expertise intimidate you from asking questions.  It is your business and your money.
2. Learn the basics.  You don’t have to be able to execute everything in your business, however, there are classes and workshops that explain how to read a financial statement, that teach best hiring practices, and a plethora of information regarding marketing and social media goals and tactics.  If you know enough about the results you should expect, you will be able to determine if someone is doing a good job.
3. Create effective dual controls.  Once your business is big enough, you may not be able to tell if things are being handled correctly.  For example, the accounting for your business may become complex.  You can hire an outside accounting firm to audit your financial statements and processes to ensure your bookkeeper or accounting department are doing things correctly.  You can hire a marketing manager to hold your outside agencies accountable.  Someone who does know what to expect.

I am not trying to tell you that you need to be the expert at everything.  No one would run a business if this were the case!  I am just saying that it is better to learn about all of the functional areas of your business so that you can at least manage it.

Especially areas of risk like accounting.  Or areas of large spending like marketing.  These are areas that you can’t afford to put your head in the sand.

When you signed up to own your own business, you signed up for all facets of the business.  You still need to delegate, hire experts, and outsource.  You just need to be educated enough to manage it or lucrative enough to set up effective dual controls.

And, believe it or not, once you dive into these areas you may be surprised how interesting they become and how knowledgeable you become.