Dear Farillio member,

On 9th April 2021, you asked our fabulous expert Carl Reader on the Go Far Fast Show:

"I’ve found managing the finances in my business overwhelming and a lot of the time I put up doing my accounts because my days are so busy and I'm so tired at the end of them. Can you book help with that at all? Can you give me some advice on how I can make it a bit simpler and easier to do this? I'm hoping to raise some money soon for my business, so I need to get the better of this.”

And Carl said:

Be mighty always, Farillio

Transcript:

“This is going to be a fairly quick answer, outsource it. I think that as a business owner, you need to understand the basics of finance and my book can help with that. However, the problem is that it's often seen as something that the business owner needs to get stuck into you. The reality is that it's not necessarily a good use of your time. As a business owner, if you're looking to raise external funding, the basic thing you need to know is if you are making money? You need to know if you got the cash. Are you going to run out of cash? You need to know about the different types of funding. You need to know the risks that they open you up to, the cost of them and what sits best with you emotionally. You don't need to know the finer points of the different stages of venture capital funding. At this stage, you just need to know the clear direction. I would say that basic education is important. However, as finances aren't your skillset, look to outsource or employ somebody to do it. As a business owner that is what I always try to do. Whilst I am an accountant by training, I am the world's worst accountant. I'll be very honest and say I don't enjoy accountancy. I don't enjoy numbers. I actually find it quite overwhelming when I see the detail, so I always look to narrow things down to three key numbers that tell me whether things are good or bad. I look to that in every area. So, for example, with our profit and loss, I look at what is our sales? What is our margin? What is our total overhead? If one of those is out of kilter the team then look into it and fix it. When you know the key highlights that you're aiming for it becomes so much easier. To understand what it is that you need to aim for, you can either take advice or you can perform that basic education yourself. Ultimately, I think a lot of this will come down to outsourcing.”

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Want more from Carl?

You can also find Carl’s answers to other questions being asked by you and your community in our Dear Farillio Expert section on our blog site, and Carl’s great guidance on business here.

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