Head for Figures Gets You Ahead
I’ve only known David Hood for about five years. That’s when we helped his company acquire a client of Davis Marketing Group,a.k.a. The Graybeards. When I thought about Hood’s idea, I reflected on how many young people are coming into the industry. They are alert, bright, enthusiastic and trying to establish themselves. This new generation of managers/owners/executives is taking over a big segment of the industry.
As I look back on all of the mergers and acquisitions with which I have been involved, I am amazed that very few executives — young and old — fully understood the role that accounting plays in our business. This new generation seems to get it faster than most of us old-timers, but even they have not taken as much time as they should to learn the financial side of the business.
Every financial transaction, every loan, every sale of a company — on both sides of the transaction — is driven by an understanding of the financial structure of the company. That means an understanding of accounting.
Accounting is to managing an alarm company what gasoline is to running a car. You can be the best driver in the world and you can understand every component of an automobile, but if you don’t have any gasoline you’re not going to go anywhere.
The same is true for accounting in our industry. Take time to understand what it means to your business.
Knowing the Technicalities
On the technical side, there is a whole world of information out there. It is hard to manage a technically driven company without being technically competent.
When I ran Security Associates is the late 1990s, I was handicapped to the point of distraction by my lack of technical skills and my understanding of how it translated into management decisions. That came back to haunt me.
You need to understand the products you install, know the range of services you can logically expect to provide, and become knowledgeable about how those products and services translate into a well managed company.
Both disciplines, accounting and technical expertise, are important. Hood recognized this early on in his career and credits the success he is now enjoying to the accounting/financial/technical education he gave himself.
If you are young, pay your dues. It will come back many fold. If you’re not so young, it’s never too late to start understanding what it is that will make your business grow.
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