Jordan Edwards — July 26, 2019 — July 26, 2019
Business is an evolving process: fail quick, learn, and continue.
The first bookkeeper we hired when we started our company wasn’t a senior accounting professional. He was fresh out of college and knew the basics, but he didn’t have much experience in the field; however, that was what we could afford at the time for our startup.
Everything went well with him at first, and he stayed with us as we opened stores one through six. Then, one day, we got a call from a vendor who was concerned because he hadn’t been paid yet.
Red flag! As a general principle, we always pay our vendors, landlords, and service providers first.
The bookkeeper wasn’t in that day, so we went over to his desk to see if we could find the root of the problem. As we went in search of the records of who was paid and when, we came across a drawer full of dozens of unopened letters, some stretching back as far as weeks. It turns out he wasn’t even opening the mail every day. That’s as fundamental, ABC a rule as they come! Some people hide from the scary bills, emails, voice messages, etc. Don’t. Instead, deal with things as they come. Never hide. It’s far more scary when you ignore the problem. And always open your mail!
After searching, we found the unpaid invoice and promptly settled with the vendor. The bookkeeper didn’t last much longer—and not because we fired him. We tried to work with him and mentor him, but people who don’t practice fundamentals find a way to exit the system naturally. After that, we struggled to find a replacement. After going through a string of new hires without success, we sought out a staffing agency to assist in our search. At this point, our business was doing a few million dollars a year, and we needed a senior accounting professional. One of the hardest parts of starting a business is determining when you have enough revenue to invest in a highly paid position; at this juncture in Mixology’s journey, we knew we had arrived at that point. This is not always as clear, but thoughtful deployment of resources is essential. There may not be implicit room in the budget. However, with the right person they will pay for themselves many times over.
We told the staffing agency exactly what we were looking for: someone who didn’t just know basic accounting, but who could also bring experience and advice to the table. And we found him—Eugene Parisi, a controller. He cleaned up our books, helped us create a budget, and made sure to input the expenses into the system daily.
The first year, he saved our operating budget a whopping one million dollars simply by doing the fundamentals correctly, such as sticking to a budget, understanding variable versus fixed costs, etc. His contribution has only grown with time, and he’s a valuable asset to our team. How has he been so successful? Well, Eugene never forgets to open the mail.
Success Starts in the Bathroom
If you want to know how any business operates, you don’t need access to their boardroom; you need to walk into the bathroom. What does it look like? If it’s a mess—if they’re not taking care of the fundamentals—you can bet the rest of the business isn’t taken care of, either.
What does this mean for you? Don’t get too in the weeds on extraneous business tasks if doing so takes your focus away from the nuts and bolts of your operation, and make sure you take the time to do things the right way. Remember: how you do one thing is how you do everything, from organizing your stockroom to running your books.
Consider this house analogy: If you were building a house, would you start by choosing the perfect curtains or installing a decent plumbing system? You don’t want crap all over your new curtains, so we suggest you make sure that plumbing system is buttoned up. Focus on the plumbing. The foundation.
In short, always keep your bathroom clean.
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