Episode 4 of ZigZag included the backstory of the company behind the podcast. It was not an a-typical startup story, but one line caught my ear.
I don’t want to think about the money.
This too is not a-typical of founders. They have an idea. They want turn it into a product (or service). They like the concept of having customers and running a business. But when the time comes to ask a customer to pay, or even more often, when the time comes to account for a payment, then running a company is no longer fun.
Or in other words, they want to focus on the product, but not the business.
No one said startups were easy. To have a successful startup you need to do a lot more than deliver a product. If you’ve missed my Entrepreneur Skills Map, over there I explain seven skills every successful entrepreneur needs.
One key skill is operations and another is finance. Those two go together into a skill set called accounting. Did you make a profit today? If you have to ask your accounting, then you are doing it wrong. If you cringe at the thought of figuring our the answer then maybe you need a co-founder who thrives on spreadsheets.
I’ve seen this issue with a lot of my students and too many of my fledglings. Accounting is tedious, but it is not difficult. I don’t find it as exciting as building a product or delivering a service, but its something that must be done. I suggest entrepreneurs do it themselves at the start, so that they know where every dollar gets spent and sees how every dollar earned flows through the company.
Do that for a year or two and then you’ll much better understand the financial reports provided by the accountant.
Remember, companies survive and thrive only when income exceeds expenses. If you are not watching the money, how are you expecting to reach that milestone?