Calm is a strategy.
No owner has ever made a big decision with complete information.
The order has to be confirmed today. The bank wants an answer by Friday. The candidate you want to hire is waiting for your yes.
That is how it will always be. Time pressure and incomplete information are part of running a company, and no adviser can remove them. Nor should anyone promise to.
What can be changed is the starting point. Last month's figures arriving in three weeks is not a given. The owner who knows where the company stands meets the same hard decision with a very different calm than the one who has to guess.
That calm is built on choices made long before the decision lands on the table. That is why we call it a strategy.
Unrest has a price
Unrest does not appear as a line in the accounts. It costs all the same, and usually in two ways.
The first is the decision that gets postponed. The investment waits another quarter, because nobody quite knows whether the company can carry it. The hire slips. The price increase is never put through, because nobody knows which customers are actually profitable.
Each postponement looks sensible on its own. Together they can cost years.
The second is the decision made blind. You say yes to the big order because it lifts revenue. Six months later it turns out to have cost more than it earned.
The numbers that could have shown it existed. They just came too late.
And then there is the price that cannot be counted in kroner: the nights when you do not know whether the liquidity will hold until next month. That unrest follows you into the office the next day, where the decisions have to be made.
A pattern we know well: an owner puts off a necessary price increase for a whole year, because nobody can say which customers will carry the increase and which will leave. When the figures are finally ready, they show that the customers the owner was most afraid of losing were also the ones earning the least. The increase could have gone through twelve months earlier.
What the numbers mean
The natural response to uncertainty is to ask for more numbers: one more report, one more KPI. It feels like control. It rarely brings calm.
Calm comes from knowing what the numbers mean for your particular company, and from being able to trust them.
Take a falling gross margin. It can mean that purchase prices have risen. It can mean that discounts are too generous. It can also mean that stock has been counted wrongly. The number is the same, but the right decision is different in each case.
The difference lies in understanding. It comes from knowing the company from the inside: the customers, the contracts, the seasons and the people. A spreadsheet can show that something has changed. It takes insight to see why.
Calm has an order
We founded Summ as an accountant and a CFO. The accountant sees the numbers once the year is over. The CFO has to use them before it is.
From both sides of the table we see the same order: first, control of the finances. Then calm. Then the good decisions.
It only works in that order. Yet it is often reversed. The strategy comes before the overview, and the budget is built on numbers that have not been reconciled. A plan built on numbers nobody trusts is a guess with a nice front page.
Control of the finances is craftsmanship. Bookkeeping reconciled every month. Monthly accounts ready a few days after month end, while they can still be used. A view of liquidity that reaches at least a quarter ahead. It has to be done every month, including the months when nobody is looking.
Only once that is in place does the calm come. It comes from knowing where you stand.
And only with the calm come the good decisions. They are not necessarily the cautious ones. The owner who knows the numbers dares to say yes to the right investment, because the risk is manageable. And no to the wrong order, even when the revenue is tempting.
The adviser who speaks up
Numbers you can trust are one half. The other is an adviser who speaks up when something does not make sense. Even when it would be easier not to.
It sounds simple, but it is the hardest part of the profession. It is easier to deliver the report than to say what it means. And easier to confirm a plan than to question it.
An adviser who only confirms gives false calm. And false calm is more dangerous than unrest, because it makes you stop looking.
Another pattern we know well: an owner arrives with a budget that shows growth, and a loan offer to finance it. The answer is not what he has come to hear. The numbers behind the budget have not been reconciled, and the growth sits with the customers who pay worst. We ask him to wait a quarter and get the foundation in order first. The loan ends up smaller. The growth comes anyway.
We are here to advise you. Not to please you.
What only an owner can do
When the numbers are ready before you need them, you do not have to be a bookkeeper at night or guess when the bank calls. That leaves room for what only an owner can do: choose the direction.
Who to hire. What to say no to. When to invest, and when to wait.
Those are the decisions that move a company, and they are best made by an owner who knows where the company stands.
The time pressure never goes away. The guessing can.
Three questions for owners and management
- How many days after month end do you have accounts you dare to make decisions on?
- Do you know which orders, customers and products make the money, and which cost it?
- When did your adviser last tell you something you did not want to hear?
Deniz Patilovski and Hassan Ajina, founders and partners at Summ.