By Strive Masiyiwa
“If you don’t know your numbers, you don’t know your business”.
If we want to launch an entrepreneurship revolution which will see tens of thousands of new businesses that employ millions of people across Africa, one of the first steps is to ensure basic #Accounting as mandatory for all school and college leavers.
As I told you a few weeks ago, one of the greatest inventions of all time is credited to famous artist Leonardo da Vinci’s math teacher… an Italian Christian monk in the 15th century [the 1400s, more than 600 years ago!]: “The Balance Sheet” used in business accounting and management.
__If I had my way, every entrepreneur in Africa would learn how to do a simple #Balance Sheet of their business, by themselves without help!
For most of you, this equation is one that should be very familiar to you by now: Assets = Liability + Owner’s Equity
It’s so, so simple that if you don’t know how to do a balance sheet today, in just one month you will have begun to master it, even if you did not pass maths in high school!
If you have this basic training and venture to learn more, then you will acquire skills to build the “Process” in the “3Ps”.
__You cannot build scale, if you don’t drive it from Financial Management. My team put together a few links on the basics for you this week in the Afterthoughts, but it’s just a sampling. You must do your own homework here.
Even if you yourself simply want to invest in companies that are listed, then you will never do it properly unless you are able to read basic financials and to track them over time.
Now besides reading [and preparing] financial statements, where else are #Numbers the language of business?
Be prepared to show potential investors that you are “well read” about your industry, including in #Numbers. When you prepare your #Pitch, paint the opportunity in #Numbers, not emotions.
Memorize the figures you can, but in case you suddenly get a brain freeze, have them at hand in your notes. If you’ve watched even one episode of Shark Tank or The Profit you know exactly what I’m saying here.
Especially for deeper analytical questions where they’re busy “crunching the numbers” to see if your business offers an exciting investment opportunity… You don’t want to be digging around in your memory banks, or worse, you have no idea what they’re talking about at all!
Let’s say for instance you want an investor or financier to put money into your soap making venture:
1. What can you tell me about the history of soap making?
2. What can you tell me about the global soap making industry?
3. What can you tell me about soap making in your country [history and current status]?
4. What can you tell me about trends in soap making?
5. What can you tell me about the raw materials and issues of sustainability?
6. What can you tell me about where the technology of soap making is, and where it might go?
7. What is happening in the digital space?
8. How is it marketed?
9. Distribution strategies?
10. Talent and skills in the industry?
The most serious investors usually come from the industry itself and are looking for you to impress them with your @Knowledge. “Study to show yourself approved… someone worthy to be invested in.” These questions apply to every single industry in the world.
By now you know that fear of maths and numbers is an acquired #Mindset. No one is born with this fear. If you still have it, please don’t pass it onto your children! Help them to LOVE numbers. It’s never too soon! They’ll thank you later.
“If you don’t know your numbers, you don’t know your business.” Marcus Lemonis
• Masiyiwa is a telco entrepreneur and founder of Econet.