Every industry has jargon that is unique to it but when acronyms (letters instead of words) are also thrown into the mix, it can be very difficult to understand what the other person is saying!
WIP – bootstrapping – DV – leverage – GP – take it off line – IRR – synergize – B2B – SWOT – blue sky – BAU – low hanging fruit – BD – CSR – EOM – YE – KPI – P/E – ROI – TOS – CAPEX – FX – NDA – MPI
Meaningless jargon and acronyms get in the way of good conversation. They put up barriers, are intimidating and often ignore the needs of the audience.
As a business owner, you will no doubt be taking advice from professionals such as lawyers, accountants, business advisors, bankers and insurers.
Use advisors who are a good fit for your style. Of course, honesty and integrity are vital, and in addition to them being approachable, available when you need them, have practical application, and provide sound, logical advice, you need to be speaking the same language!
While most professionals will have a degree or two under their belt, we all know there is no requirement to have a degree in order to be a business extraordinaire! In my opinion, university educated professionals often don’t realise they are speaking in a way that others don’t understand.
Before you head into a meeting with your advisor, consider what you would like to get out of the meeting. After all you are the client and they are working for you. Professionals have an obligation and are bound to provide certain types of information but if you are not sure what they are saying, don’t be afraid to let them know. Rephrase what you think they have said and ask them to confirm your understanding is correct.
Let’s say you head into your tax accountant for a meeting to go over the financial statements and tax returns. You shouldn’t just focus on how much tax you are required to pay; instead use the opportunity to increase your business knowledge. Annual accounts provide analytical data that can be very beneficial. It would be a good idea to write down 5-10 questions you would like answered. Any question is a good question and here are some examples:
- Why are your accounts showing a profit but you don’t have the cash to show for it?
- How much is your business worth?
- What factors are taken into account when valuing a business like yours?
- How do markups and gross profit work?
- What are the opportunities for increasing returns?
- Are there any inefficiencies showing in the accounts?
- Is there benchmarking readily available so you can see how you perform against similar businesses?
- Should you be considering scaling up to take advantage of economies of scale?
- Should you be diversifying your customer base, product, or location?
- Is there any new technology that would make your life easier?
- Is there any new legislation that has come into play that you need to be aware of?
When considering what questions to ask, think about what keeps you awake at night.
There is absolutely nothing wrong with asking your advisor to speak plain English so you can fully understand. They would probably prefer to have that conversation than you leave them to go somewhere else.