Can you run a business from a spreadsheet?
Author: Russell SmithMarch 22, 2012
A few years ago I was having a meeting with a very successful entrepreneur who said to me ‘but Russell, you can’t run a business from a spreadsheet!’.
I knew what he was getting at. Business growth requires drive, determination, ambition, innovation and creativity. However, I disagreed with him then and I still do now.
Clearly I love spreadsheets (I am a chartered accountant). I have spreadsheets on my favourite films, favourite books, scrabble scores and probabilities. I even had (note the word had) a spreadsheet of the layout of the local Morrisons which I then imported a database of shopping items into to make shopping a swifter experience.
However, despite the fact that I love spreadsheets shouldn’t dissuade you from the fact that knowing the numbers in your business is 100% critical.
One of the obstacles to getting this message across is the business owner doesn’t like numbers. As a firm, education is key to us because we are passionate about helping the business owner understand and get on top of their numbers. But at the very least, the business owner has to, at some point, either have a trusted external accountant or internal accountant who is able to communicate what the numbers are saying.
It’s unlikely that you would travel in your car without reference to your dashboard. In the same way, running the business without reference to the numbers is asking for trouble.
This needn’t be a negative thing though, knowing your numbers can give a real freedom and a clarity to decision-making. I’ve often been in board meetings where an argument is put forward to take a certain action and it is grandly blasted down since the numbers don’t support the decision.
I get what my entrepreneur friend was saying but give me the hard numbers any day, these will give me the up to date position of how I am running the business.