Understanding the Game of Business: Article by Tina Zawila

Recently, we had the opportunity to present to business owners on behalf of the Department of State Development.   The objective of the workshop was to improve the financial literacy of business owners to help them make better business decisions.  

To make it easier for participants to understand some of the concepts, we often compare being in business to participating in a sporting game.  You generally wouldn’t play a game where you did not know the rules, (such as ‘offside’) didn’t know the language (such as what a ‘try’ is in a footy game) or where you had no idea how to read the scoreboard to know if you are winning or losing!  Yet many business owners, don’t know the rules of business (such as profitable businesses can and do go broke), don’t know the language (accounting terms), and can’t read their scoreboard (their financial statements).  Yet this Game of Business is probably one of the most important games they are playing!

We talked about how understanding your numbers, and being able to interpret your results, allows you to make sound business management decisions, which become activities within our business which lead to our results.  Again to use the sporting analogy, the coach of the team regularly uses the scoreboard and the time remaining in the game, to influence the decisions he makes regarding on how his team plays the game.  As the coach of your business team, are you interpreting your results correctly and making the right decisions based on this information?

Now don’t panic, you don’t need to become an accountant, but you do need to get a basic understanding of the most important principles.  Your accountant or business advisor is there to support you and assist you at any time with any of the more difficult concepts. 

At Sothertons Gladstone, we are passionate about improving the financial literacy of the business owners we work with.  If you need help with the Game of Business, please call us today on 49721300.