By the time John Denison realized how bad the Great Recession had gotten, the company had been in it long enough that he decided not to make any personnel changes. Unfortunately, it got worse but Denison still held on to his employees.
“My theory was it was hard to get all these good people, it had taken a long time to get them,” says the owner of Denison Landscaping. “Why did I want to tear apart what I’d built in one year’s time? It turned out to be a mistake.”
L&L caught up with Denison about how he plans on avoiding that same mistake next time.
L&L: How do you plan on being ready for another economic downturn?
JD: Watch for the downturn. I just got preliminary, preliminary, preliminary documents yesterday on the financials for the year.
I need to look anywhere that we’re sliding off the side of the hill, if we are, and approach that immediately this time – watch the labor numbers, watch the labor dollars.
L&L: You didn’t do that in 2008?
JD: Oh, I did, but I wouldn’t think that I was anywhere near as quick to want to see them and as worked up about seeing them.
It was one of those things, ‘Yeah, I’ll look at the numbers when I get a chance,’ and then before you knew it the numbers were pretty bad – ‘Yeah. We made a lot of money. It’s good. We’ll look at that later,’ and that’s not the way we look at it right now.
L&L: How long did it take you to get a good grasp of understanding your company’s preliminary numbers?
JD: Oh, it took years, man. It took years. The accountants developed things within the company that were special.
I don’t want to look too stupid to everybody, but probably 10 years to really understand what I was looking at financially and to be clicking with the accountant that I had.
It took a good 7-10 years for me to understand exactly the programs and the thoughts and the ideas that were there.
L&L: What’s one piece of advice you would have for an owner who is trying to get a grasp of their financials?
JD: That’s a good question because I guess literally I didn’t understand everything about the financials and I didn’t want to look stupid to say I didn’t, so I taught myself and guarded against looking too stupid the whole time.
Now, I understand extremely well. So, mine would be for that person to get a better understanding right away; first and foremost would be just to ask the accountant when they tell you things that you don’t understand. Stop right there and make sure you understand that.
That would be the number one thing, and then if you still are struggling with it as people do, then I’d go ahead and take a class at night or something along those lines until I completely understood. Also, it’s okay not to know.
There’s new crap in accounting all the time and it’s the one thing that’s going to tell you whether you’ll make it or not. So, you better damn well figure out a way to understand it.
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