The fact that a business has audited financial statements does not necessarily mean that it is in healthy stead. That the gist of Vusi Thembekwayo’s article.
The popular business coach says the biggest flaw with the South African entrepreneurs is too much focus on financials at the expense of performance. He sees the main shortcoming with financials as only giving a picture of a business only at a point in time, while a business is inherently dynamic.
Instead, Thembekwayo believes that a business should follow a numbers etiquette.
“Numbers etiquette is what happens when you know what is happening in your business. What is your marginal cost per unit, your fixed costs or variable costs, your four major cost drivers, your value adding and non-value adding costs or even your ebit (earnings before interest and taxes),” Thembekwayo says.
He adds that knowing the numbers and more should be a business’ single most important pre-occupation.
