Owners of businesses – particularly closely held businesses – often divide responsibilities for company matters based on their individual strengths, interests, likes/dislikes, etc. Those that are good at sales handle sales; those that are good at production manage production; etc. This makes perfect sense, and I get it. In fact, these types of preferences, skill sets and synergies are often the reason that certain people make good business partners. However, this does NOT mean that they should not monitor each other’s performance and the performance of all material aspects of the company’s critical business operations, processes and finances. Failure to do so often leads to misunderstandings, and in extreme cases can lead to business breakups or even outright failure.
Frequently I encounter businesses whose owners are not particularly strong in financial matters or simply don’t enjoy monitoring the company’s finances. Without sounding too harsh or patronizing – complete delegation of your company’s finances to another party (even your trusted business partner) without regular reports, monitoring, etc. is NOT acceptable or prudent. After all, as an owner, that’s your money they’re dealing with.
We all know the old saying – “The buck stops here.” Well, part of being a responsible owner is understanding that the buck stops with you. Too often I’ve seen owners who discover too late that someone was doing something wrong, something was not getting done at all, or the business simply wasn’t healthy or performing properly – and the explanation frequently is that it was someone else’s fault. I hate to be so blunt, but it’s always the owner’s fault – and it’s always the owner’s money that’s lost.
The bottom line is ownership comes with benefits, burdens, responsibilities and obligations. Monitoring all aspects of your company’s performance and finances is one of the burdens – or at least one of the responsibilities. Take it seriously for your own benefit and protection.