Forums: Discussions for entrepreneurs and small business.

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Lauri Burkons
Technical Writer and Writing Coach
Burkons Consulting
330.338.7064
lburkons@neo.rr.com
www.burkonsconsulting.com

Price is what you pay. Value is what you get.
- Warren Buffet

On the concept of fundamentals, it`s like playing the piano. You start with scales, then the correct fingering for each key. When you`ve mastered that, you move on to the next more complicated moves.

I hated scales. I hated fingering. It wasn`t until I got older and was playing in bands that I met a Zen-type piano teacher. He asked my why I played the scales the way I did. I didn`t have an answer, other than I felt like it.

So he had me play a few scales over and over for about 30 minutes in our first lesson. "Humor me," he said.

At the end of the half hour and I`d stopped, he asked me how my wrist felt. It hurt like hell...!

Then he asked me how I liked the feeling at the end of a night on stage, and I had to admit, it sucked.

"It`s because you`re not using your arms to go with the piano. You`re not working your muscles correctly. If you don`t learn the best way to play the scales, you won`t play chords or anything else the best way. Right now, you play only a couple of hours. How will you do when you play 5 hours a night, 6 nights a week."

Well...I had to admit I`d never thought of that. :-D

It`s the old "wax on, wax off" from the movie Karate Kid.

Now the problem with business is what are the analogs to the scales and proper fingering?

From that perspective, I`d suggest a very different way of making a list:

• Basic accounting
• Written processes - instructions on anything that took more than 5 minutes to learn.
• Basic marketing and sales
• Simple display and layout - coursework on what makes an attractive design for a store, window, or Web site.
• Basic inventory management and control
• Economics 101 - understanding the concepts of profit, loss, cash flow, return on investment, equity

If we`re going to build complexity on a foundation of basics, then those are the basics. From having hung out here on Startup Nation, I can see that a lot of new entrepreneurs aren`t so knowledgeable on these most basic and fundamental concepts.

@BurkonsConsult, I think your description of change and change management is right on. You really have presented a good case on why a business reaction to change is an essential discipline all businesses must master.

@Craig--Your Wax-on, Wax-off analogy is spot on...in fact I think that is the same exact analogy that was used in the book I referenced. You are toning your muscles to react in a way by instinct, but also at the same time, having a better more intimate understanding of the "movements", you are able to tweak them to each individual scenario that would present different challenges.

My issue with a lot of the items on this list is, mastering these basics will not lead to mastering business. Mastering accounting, I don`t believe is necessary. Display and layout of a store can be outsourced and inventory control can now be widely digitized and automated, or not even relevant to service businesses (right?). However, having a deep understanding of converting inputs into more valuable outputs can potentially give you new insight into new process innovation. Ask yourself: does this process work? And you may answer: "Yes because what we produce is more valuable than the resources we contributed to it." If you don`t understand that basic concept, you won`t understand what makes a process or business successful.

In order to understand how to react to change, you need to understand the nature of change. In order to transact, you need to understand the nature of the exchange (ie: customers want a QUICK exchange, usually).

What is accounting? It is really just a way of keeping track of resources and where they came from. Why is that useful? Well ultimately you really want to know if your operations are in fact, profitable (ie: the value of your outputs exceed the value of your inputs), and what resources you have to work with in all different sorts of contingencies or plans of growth (strategy and planning).



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Motivation for Entrepreneurs
Entre-Propel.com

Yes, you do need to know the basics of it, but mastering accounting does not necessarily make you a better business person. I think the concept BEHIND accounting (ie: knowing how profitable your business is and what resources you are working with) is what makes accounting so important, and understanding this concept more deeply has much broader uses and implications than just accounting, such as planning and forming strategy.


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Motivation for Entrepreneurs
Entre-Propel.com

Wait a minute.. :-D We can`t say that a "basic" is the same as "mastering." You can`t "master" scales and suddenly be a concert pianist!

The whole idea here, is what fundamentals act as the bedrock foundation of knowing how to be a masterful business person. If you don`t understand profit and loss, the you never will be a master business person.

But to know what profit and loss even means, you have to know the concepts of accounting.

Another classic is that "you have to lean how to walk before you can run." But mastering walking doesn`t make you a runner at all. Running is a whole different set of skills. But it begins with the first concept of knowing how to walk.

Yes, but walking, like running have same basics that is locomotion and standing upright on two legs. If you can`t use your leg muscles, you can`t walk OR run.

What I am saying is that there is a basic behind accounting that has broader implications than just profit and loss.

Understanding intimately what resources you have to work with is an essential ability, where the better you are at it, the better you will be at planning and finding new and creative ways to use and conserve resources. Accounting has some roots to this, but keeping track of and using resources is a much broader discipline than just Accounting.

And understanding that Profits = Revenues - Expenses is hardly understanding the concepts of accounting...hell they taught me that in an economics class



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Motivation for Entrepreneurs
Entre-Propel.com

Right, but practicing certain basics will allow you to get more proficient in the more advanced disciplines that these same basics would apply to, no?

Its not too much information, its practicing certain basics to get better and better at it. Think communication, managing, leading, selling.



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Motivation for Entrepreneurs
Entre-Propel.com

One of the problems I`ve come to see in life, my own included, is that difficulty in staying focused. My father always pointed it out when I was a kid, and I always got annoyed. Then as I got older, I got less annoyed and realized he was right.

When we discuss business *basics* we`re discussing the fundamentals in their most simplistic way. We`re not discussing their many permutations and future consequences, applications, or theoretical foundation.

By definition, someone who is a novice and who needs to know basics, doesn`t yet have the context or knowledge to understand anything beyond those basics.

We say "accounting," and someone asks why they need to know the basics? It`s because they need to know that money can (and should) be tracked in a particular way. They need to know that a profit is different from a loss.

Profit and Loss, as well as Cash flow and Credit-Debit is fundamental. In order to answer any of the questions regarding the basic concept of profit or costs, the person then learns about new concepts and new ways of examining work.

The whole point of learning basics is to open the mind to even more complex and also new ideas. But if you give a novice too much information, they get overwhelmed. Then they learn nothing. :-)