Learning the Hard Way
In the early days of my business, I had no idea what a Profit and Loss was, how to read a Balance Sheet, how to create a Forecast, or how to analyse Cash Flow. Nor did I know where to go to learn about any of this information. The only professionals I spoke to (accountants) seemed to be speaking a foreign language that was created to make people like me feel like idiots. It felt like a secret club that was specifically designed to keep “people like us” (creatives) locked out, fending for ourselves on the streets.
The unfortunate thing about my experiences with nerdy accounting-types was that it pushed me even further away from learning about business finance, and this eventually had dire consequences.
Within the first 3 years of running my business, I managed to get into a large amount of debt. My credit cards were maxed out, I owed money to suppliers, and I had no idea how I was going to get out of the hole that I found myself in.
For a long while, I stuck my head in the sand, and refused to do the necessary review of the figures to work out exactly where my finances were at. I knew I owed a lot of money, but I didn’t know how much. Naively, I thought notknowing would make me feel better, but in reality it only served to increase my levels of stress and overwhelm.
Suffice to say that eventually, I had to face the facts.
Rock bottom came on the day when I presented my figures to an accountant who glared at me over his spectacles whilst I nervously clutched my scruffy shoe box full of papers and receipts. With no hesitation, he scoffed at me and told me to file for bankruptcy.
This ended up being a turning point for me both personally and professionally. Personally, I had a choice to make. Did I want to screw over all of my wonderful suppliers who have waited patiently for their outstanding payments? Professionally, I was faced with the choice to either give up, or take control of my financial destiny and become a new, more responsible, capable and accountable business operator.
Needless to say, I chose to dig my way out of the hole, and not take the easy road of filing for bankruptcy.
The way forward was to reach out for help. I went to friends, family and colleagues in the industry to get educated in the processes necessary to run a healthy, profitable business. It took a lot of hard work, commitment to reviewing the figures on a regular basis, regular communication with the businesses I owed money to, and some well-resolved plans to repay the money I owed.
