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The Business Man and the Banker—How Accountability Can Help You and Your Business Grow

Joe was growing a successful business, at least by most measures of success. However, motion (how busy you are) and progress (how far that effort is getting you) can often be confused with one another.

Like many businesses I know, Joe was busy 12 hours a day and often cash-tight. The money didn’t come in as fast as he had to meet his commitments (payroll, rent, suppliers, etc.,) and the crunch was getting closer and closer to disaster.

Early one uneventful Tuesday morning, sometime between the third and fourth coffee of the day,  his banker reaches him on the phone.

“How are you, Armin?” says Joe.

“Great! Hey Joe, we are trying to clear a cheque you wrote, and there isn’t enough on hand. I’m checking to see if you’re bringing a deposit in?”

Aside from the fact that you may not remember when cheques had to be deposited physically at a branch, this story relates to a typical business experience.

Joe should have thought, “There appear to be too many bills and insufficient cash in the bank to turn motion into progress.”

Instead, he froze.

A cough cuts through the line—a puff of static.

“Joe? Are you there?”

In a flash of brilliance, he grabs a bunch of old receipts from his desk and rifles them close to the phone’s mouthpiece.

“Absolutely, got them in hand. I’m heading to a meeting with a client, but I’ll be by to deposit them this afternoon. Thanks for the heads up!”

“Perfect. Once you’re ready, we will get this ready to go.”

What led Joe to this one-minute phone conversation and what he did afterwards can have a whole lot of implications for how you view yourself, your business, and what it means to be accountable to the person you want to be. In this blog and the next, we’ll look at two sides of this story.

Firstly, the down-and-dirty business tips that can help turn your financial partners into your cheerleaders as you grow. Secondly, in our next blog, I’ll give you my completely honest opinion on the emotions, fears, and insecurities that can put us into a position of feeding ourselves and others little white lies.

Lying as a Business Owner is a House of Cards

Have you ever replied to someone, “I’m so sorry, your email ended up in my spam folder,” knowing that you just forgot to respond or were busy and missed it?

Have you ever cancelled your attendance at an event with “I’ve come down with something,” only to head out to a more fun thing?

Or borrowed a personal effect you didn’t return? Then, just avoid the subject with the person in perpetuity?

If not, you are among the nearly 0% of people who have not; bravo! You are wise and should give lessons. If you raised your (virtual) hand, welcome to 99.9% of humanity. Here is your complimentary low-level panic attack.

There is a version of lying that is quite normal and inspires us to act. You may say something that is presently untrue but then engage to make it true. For example, telling someone, “I was just on my way,” and then you hustle to get there.

Making a small problem into an enduring solution is more than just the journey from lie to truth. It’s about building continuity in your business and making better decisions every day.

Articulating Your Cash-Flow

As we know, Joe didn’t have any cheques on his desk. He may have lied about that to Armin, but he endeavoured to make it true as soon as possible.

What Joe was lucky to have was a busy schedule and the opportunity to travel to his many clients. Of course, a bookkeeper could have helped him track and collect his receivables, as would online banking and those annoying but helpful reminders. By lacking a transparent financial partnership with someone who could regulate his finances, Joe had no overdraft, line of credit, or ‘low balance’ notifications. He assumed that would be the role of the banker—someone he often kept at arm’s length.

What he did do was spend the rest of the day driving to those clients and begging them to write him cheques on the spot for their invoices. After enough of them did, he was able to turn his ‘aspirational’ story to his banker into truth.

The issue isn’t that the money wasn’t there to clear Joe’s obligations since, in a sense, it always was. It may not even be that Joe lied since everything worked out. The problem I see with so many of our clients is that they feel the need to lie.

Building a better business shouldn’t come at the cost of inflating or tearing down our much-needed egos. So why do we expect self-judgement to accompany the challenges of being an entrepreneur?

Reframing the Cash Flow Question

Ask yourself: Was Joe a liar, or was he a dedicated entrepreneur solving a day-to-day problem?

Should he feel like a fraud for telling the story, or a hero for going the distance to make it right?

Joe would argue (I know Joe well) that he might have felt like an imposter while on that phone but then acted to resolve the problem. Commitment, action, and reaping the rewards of past efforts took him from telling white lies to being solvent.

Now, Joe is honest and has become a very successful entrepreneur through no small amount of grit. He didn’t like how telling that white lie made him feel and got on the track to make himself an honest man again.

Again, liar or hero? Before you answer, here’s the part of the story you don’t know yet.

Joe had the confidence of knowing his customers were good, would hear him out, and that he had built relationships and trust capital over time with them. His banker trusted him, and Joe wanted to live up to that promise. He knew he could collect those signed cheques on the spot and get to the bank before tea time. He just needed to act

But imagine he didn’t have that confidence and didn’t get the cheques—he now has two choices.

  1. Admit he lied in the first place
  2. Double down on the lie by making another excuse.

Suppose your first reaction is option 2—yikes. More financial dysphoria (yes, we coined that) and less credibility with the banker at ANY time in the future.

With the wrong kind of lie or one based on our egos,  a short-term problem becomes a long-term one.

Living purely on ego is living on borrowed time. As a responsible business owner, you have an obligation to act to make things right. Later, it’s your job to your actions and behaviours (or maybe beliefs) that are causing the harm. For Joe, he made a choice that balanced what he knew about his business with an ego that needed a little tweaking.

But how can we tweak and escape the cycle of lying? The recipe is easy.

  1. Acknowledge the problem, then admit it. Rip off the band-aid.
  2. Problem-solve. How could you improve on this issue and prevent future occurrences?
  3. Address the solution through action and rebuild the trust with the stakeholders.

Addressing Cash Flow Problems Professionally

Weeks after his lie, Joe sat down with his banker. He couldn’t bear the weight of having manipulated the situation. Despite having solved the problem, he wanted his banker to know. Let’s look at how the dialogue moves through the 3 steps listed above.

“Armin, I’ve had a challenge in the business lately. We have been growing too quickly, and I hate that you’re having to call to make sure my deposits will make it in time.” (STEP 1) 

“Joe, I can see that you’ve been growing, and I’m looking out for you. But yes, we should talk about what my team can do to help.”

Joe is prepared. “I’ve hired a bookkeeper who can also help me keep up with the growing receivables, but I think I also might need some other strategies. What can you recommend?” (STEP 2)

The rest is a long, technical story I won’t bore you with. Suffice it to say he added an overdraft, built a plan for a more extensive line of credit, and also did a sale-leaseback on some equipment he had paid cash for at auction to generate a little extra working capital cushion in the business. (that is where Prime Capital came in, just to remind you that sometimes I know what I’m doing—learn more about securing your own plan here.)

I’d love to say that Joe’s business never looked back, but this was not the last problem he faced. He just never met this one again, and the next time, he had a track record he could literally bank on. That brings him to STEP 3 and some well-deserved peace… at least until the next crisis.

Authenticity as a Conclusion

If you disappoint someone, be authentic about your feelings, sincerely apologize, and earnestly make an effort to avoid the situation again. This honesty is a readiness which can be turned to even ourselves, not just bankers and leasing partners.

After all, personal accountability is like rocket fuel—it will take you places, fast.

The following blog in our small business series will explain what I consider to be “scar tissue” in our professional bodies. How little lies can heal over into bigger and bigger problems that fail to address why we are insecure in what we present to our shareholders and selves.

Tune in later this month, where I’ll finish the saga of Joe on a high note! In the meantime, feel free to contact our team and start on a path to clearer finances through powerful leasing options that put you back in control of your growth—not the other way around.

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