Accounting for the Numberphobic is a great text book for non-financial business students. It provides context behind the numbers and teaches you how to actually make better business decisions.
“Every eight minutes a small business dies.” This is how I start a lot of my speaking engagements. This bit of information comes from some research I got a few years ago while digging around the census data. Of course, my next step in the research was to find out exactly WHY they failed.
And get this – there are a lot of articles and some studies, but I wouldn’t say that I found any definitive reason why. The top reasons stated were lack of funding, not enough sales, the usual suspects.
But I’ve just received a really interesting book to review that I’m going to share with you today. It’s called Accounting for the Numberphobic: A Survival Guide for Small Business Owners by Dawn Fotopulos (@Dfotopulos).
Dawn Fotopulos is an associate professor of business at The King’s College in New York and she’s rescued more than 300 small businesses and helped thousands of entrepreneurs be successful. Fotopulos believes that there is a preconceived notion that small businesses aren’t funded well and that’s why they fail.
What she’s found, instead, is that financial literacy plays a much larger roll in the success and failure of a small business. In fact, she’s on a mission to reduce small business failure by half!
If You Aren’t Making Money, You Don’t Have a Business
Lots of business, marketing and financial experts are out beating the drum about the difference between a hobby and a business. If your business isn’t making money, you don’t have a business, you have a hobby. And, while there are lots and lots of gurus out there showing small business owners how to market their business to get more customers, that doesn’t begin to cover the financial holes in their bucket that are causing them to lose money just as fast as their bringing it in.
In Accounting for the Numberphobic, Fotopulos explains a company’s financial dashboard, the net income and cash flow statements as well as balance sheets. These won’t just be numbers or reports that you pull up and print out or send to your CPA, these will transform into valuable information that you’ll use to help you make better business decisions and help you make and keep more of your hard earned dollars.
This book is written in plain English with financial terminology mixed in so that you learn the terms AND understand what they mean. You may not think so, but this kind of tone is just what the doctor ordered for a “numberphobic” or “financephobic” like me. Believe it or not, it increases her credibility because you can actually feel that Fotopulos has been where you are – and in many cases in worse situations that what you’re dealing with.
One of my favorite features is where she creates bullet points of the questions that each report is helping you answer. If you’re already a financial expert, you might think this is silly, but if you’re confused by these kinds of reports, you’ll really appreciate it.
For example, here are the key questions that the Income Statement answers:
- Is our business making money?
- Are we selling the right products and services?
- Are we pricing our products so we can stay in business?
- Are we making enough money to keep running the business?
- How do we know if marketing is paying off?
- How can we work half as hard and make twice the money?
Is This a DIY Finance Book? Not Really
As a self-admitted numberphobic, I will have to say that while I enjoyed and learned quite a bit from this book, I’m not sure that I would have the fortitude to sit down and read it through and through. I would definitely keep it handy and refer to it as I was reviewing my reports, kind of like a guidebook that I would reference if my CPA said something I didn’t quite understand.
Speaking of which, one really terrific audience for this book is – CPA’s who have numberphobics as clients. I can definitely envision receiving this book from my CPA and then working through certain sections with him. This would allow me to ask questions and get more clarity.
Accounting for the Numberphobic would be a great text book for non-financial business students. I really love that it provides context behind the numbers and teaches you how to actually make better business decisions. This book won’t make you a financial wiz, but it will certainly help you keep your business in the black.