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Who cares if your business fails? Hopefully, you do. But are you paying attention to what’s going on in your business, especially on the financial and operations management side? That’s where many small businesses fail. Often it’s the unexpected calamity that can undo a business. You need to put safeguards in place and keep a close eye on your cash flow and reserves. Because nobody really cares if your business succeeds but you.
In this episode, Gail talks with Philip Allen, chief operations officer for Lisa Kahn Designs in Naples, Florida. Philip, who is also Lisa’s husband, joined the firm in 2011 after a number of years in the construction industry. At first, he performed a variety of tasks and roles. Eventually, he settled into the position of COO, introducing more formal financial and cash management policies and processes to the firm. His job, he says, is to help achieve Lisa’s vision.
The nature of the design business is that the workflow tends to be either feast or famine, said Philip. His first goal as COO was to try to stabilize the work and cash flows in order to level out the peaks and valleys as much as possible. He established metrics such as the number of projects on the board and in the pipeline and the number of total square feet under contract at any given time. With those readings he can then go to the design team and say “we need to step things up a bit” or “we need to dial things back a bit to maintain a more even demand on the team and the financials”.
Philip stressed the importance for business owners to stay on top of the financial condition of their business at all times. “You need to look at the numbers, and you need to understand what they mean,” he said. “If you’re not looking at your business’s financial health, there’s nobody else who will.”
Philip acknowledged that many creatives have an aversion to financial statements and that they claim they can’t make any sense of them. The reality, though, he said, is that anyone and everyone can learn to understand the financials. It’s simply a matter of learning to think differently and not being afraid to ask questions. “The biggest obstacle for creatives to understanding financial concepts is shame,” he said.
As examples, Philip recounted a couple of instances when Lisa’s firm got into serious financial trouble from wholly unexpected situations. Better financial and operational oversight might have mitigated, if not completely prevented, the impact of those events on the business.
In addition, Philip shared some thoughts on what a couple should consider before going into business together and his advice for design business owners. For all that and more, listen to the entire podcast.
If you’re listening on your favorite podcast platform, read the full shownotes here: https://thepearlcollective.com/s9e8-shownotes
Mentioned in This Podcast
For more information about Philip, Lisa and her sanctuary approach to design, visit the firm’s website at www.lisakahndesigns.com.