The Power of Asking a Stupid Question

//The Power of Asking a Stupid Question

The Power of Asking a Stupid Question

When you were young, your teacher said, “there are no stupid questions.”  You believed her once. Raised your hand and asked a question. Then at recess your classmates teased you unmercifully.  You made up your mind then and there, you were done with asking questions in public.

Now you are an adult, a business owner.  You’ve put the recess event out of your mind.  Or have you? Is it lurking back there somewhere in your unconscious, holding you back from getting your questions answered?  Especially those confusing ones about accounting and finance?

Other than the rare business owner with a finance or accounting degree, most owners either grew up in the business, or came to it in some circular way with an unrelated degree, like physical education or sociology. They have little academic background for understanding, and more importantly knowing how to manage an accounting department. Since you are a small business, your accounting department is small, 1-3 people.  You hope they know what they are doing, but you don’t really know for sure.

I was walking down the hall in a client’s office one day when the business owner called out to me, “Mackey, have you got a minute?”  I did in fact and walked in his office and took a seat across from his desk.  He thanked me and got up to go close the door.  Seated back in his chair, he gathered his courage and shared his problem with me.

He had come to the role of business owner in this rapidly growing small business because he was a family member.  The prior owner had believed in him and trusted him to take over his business.  He was smart, a quick study. Over the years he had learned to act like he knew what was happening even when he didn’t.  His primary roles had always been in business development.

He had crafted his own way of understanding financials, by what he called, the “In and Out method.” It had always kept him out of trouble, so he figured it was enough. His method was to look at his cash, add receivables and deduct payables.  This was his best guess of net income.  As he explained it, I shared with him that while this computation would have little relationship to the financial statements, it did indeed have some merit.

He suspected they were headed for cash flow challenges, but he didn’t know for sure.  Would I help him translate his “In and Out method” to the financials he received every month?  Could I help him feel more financially confident?

Over the course of the next few months, we met privately.  I shared information about many different financial questions that had always eluded him, such as:

  • how to read financial statements
  • how costs are allocated
  • how inventory costs are determined and why that matters
  • the difference in cash flow and income
  • how his “In and Out method” was like or unlike his financials and why

I then brought in my team to help his accounting department build new financial reports such as:

  • summary executive financial statements
  • annual financial plan
  • forecasting systems
  • scoreboards for departmental metrics

Using graphs, we taught the key business unit managers to understand the financial basics of the business.

The results:

  • yes, there was a cash flow crisis coming, but with this new information the company was able to swerve rather than make a head on collision
  • new income grew 22%
  • cash flow improved 45%
  • his confidence, as he measured it, was up 125% since he started at -25%

Why did this happen?

Because he had the courage to ask what many would have considered the dumb question.  Can you reconcile for me my “In and out method” with the financial statements?   Then he kept asking questions, expanding his capacity and building capacity in his team.

The teacher was right.  There are no dumb questions.  Just knowledge that can help if you just have the courage to ask.

What financial questions are you avoiding?

Perhaps its time to raise your hand and ask.

To your prosperity,

Mackey

About the Author:

Author, speaker and fearless leader of the Prosperity People, Mackey McNeill is a passionate entrepreneur dedicated to creating prosperity in the lives of her clients and within her community. She has merged over 30 years of expertise as a CPA and Personal Financial Specialist with her knowledge of internal alignment to create The Prosperity Experience: a planning program rooted in self discovery and financial self actualization. A sought after thought leader on the subjects of money and intention, Mackey has been quoted in The Wall Street Journal, The New York Times, TIME, Money, USA TODAY, Mint.com and Reader’s Digest, along with many other publications.

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