Learning Business the Hard Way

Learning Business the Hard Way

When I was young, I watched my dad run different businesses. Even before I was born, he was always starting something new. He was a real entrepreneur like his father who owned a fuel oil delivery company. The story goes that when he was under sixteen, his father who had a great year in business, gave his older brothers cars. But my dad got a down payment on a duplex. He rented it out and made money from it.

After that, he tried an ice cream business and later owned Midas Muffler shops in the 1970s and 80s. Back then, car exhausts were made of steel, which rusted quickly in places like Wisconsin and the margins on the sales were very good.

My dad knew owning good investments and businesses were better than owning things that lost value. He has been gone for over ten years, but I often wonder how he made his business decisions. Did he rely on gut feelings or numbers? He used his experience and simple ideas about what would give a good return, but reading and understanding numbers was not so much in his skillset.

I believe my dad understood numbers in his mind, but he didn’t fully grasp how important accurate and consistent numbers were. I wonder what more he could have achieved if he had a better understanding of his financials. During tax season, he always seemed stressed, hoping he could manage without getting overwhelmed. I thought this was just part of being an entrepreneur.

As I grew up, I wanted to be an entrepreneur like my father. But I didn’t learn about investments, cash flow, or how to use money wisely. My business ideas were flawed, and it showed in how I ran my businesses.

After years of struggle, I finally learned a valuable lesson: accounting is foundational to business. There are many important aspects to a business, like having a good idea, a strong team, legal plans, passion, the right location, marketing skills, sales skills, and good customer service. But accounting helps you understand what’s going on.

Numbers don’t lie if they’re correct, which can be hard to make sure of. I just want to know the truth. With accurate financials, you can create a budget. With a budget, you can see where your money is going and if you’re making enough from your products or services. You can track project productivity and manage your team with facts instead of guesses. As your business grows, you’ll face new costs, and knowing your numbers helps you make better decisions. Essentially doing the hard work so you can have peace of mind and confidence in what your business is doing.

The hard lesson I learned is simple: if I could start over, I would invest in learning accounting and understanding the numbers. This was an investment I didn’t see the value in before, but now I know how crucial it is.

My dad had a successful life and provided financial security for my mom. But I believe he could have had even more opportunities and greater peace of mind if he had valued numbers more. Accurate accounting is a key part of a successful business, and that’s why I love our business today.

By: Daniel Malone