(My mother was doing her own calculation with regards to the sale of mangoes, pulp and jam)
Mother: (with a low voice) Chinmay, after doing the calculation it seems I have not made the money I thought I had made.
Me: that’s good.
Me: oh… sorry, I said ‘good’ for doing the calculation. It is definitely ‘not good’ with regards to you not making the money as expected.
(my mother was thinking something and just looking at me)
Me: imagine if you hadn’t done this calculation and were in your own Cinderella world thinking and hoping that you have made more money than expected?
Mother: hmm… I remember you telling, hope is a good thing to have but hope is not necessarily a good strategy to run a business!
Again, imagine you assuming that you have made more money than expected and then based on that assumption making investment decisions on the farm? When there was no money in the first place. Where would that additional fund come from?
Mother: now I can somewhat understand why we need to know numbers.
Me: (hearing those lines is like music for my ears)
This is something I commonly see in most businesses. Without knowing the exact numbers people are making decisions based on assumptions and gut-feel. (I hope we all know what gut is full off?)
Mother: But Chinmay, how can you take this so lightly? I am seriously concerned about what might happen next year if again there’s a lockdown?
Me: that’s good… not if there will be a lockdown but the fact that you are considering the worst-case scenario. This will eventually make you come up with plan-B and plan-C.
Mother: but still I do not see your concern in this matter. You seem to be ok with me not making the money that I had expected.
Me: Ma… because I learned very early in my entrepreneurial journey from my mentor that 1 + 1 is not equal to 2, this has helped me to keep my head on my shoulders and feet on my ground most of the time. This probably might be the reason why I may not express too much emotion when I get to know the result.
Mother: What do you mean 1 + 1 is not equal to 2?
Me: Good question.
Mother: I know
Me: hmm… even when I heard it for the first time it did not make sense but when my mentor explained, I was able to connect the dots.
Mother: ok… explain it to me now.
Me: to get any result we knowingly/unknowingly do two things – planning & execution.
Mother: (was thinking for a while and said) yes
Me: simple example, to make today’s dinner you will plan what to cook and then do the cooking (executing the plan), and then you will have the result of having the cooked meal on the dinner table.
Me: now, please be frank with your response, how many times have you had the cooked meal that turned out exactly as expected?
Mother: many times!
Me: really? Again, surpassing your expectation is not EXACTLY as expected. In other words, if the food turned to be more delicious than expected then it is not exactly as expected.
Mother: oh… then it usually never exactly matches our expectations.
Me: this is exactly the point I am trying to make.
We plan something (let us say 1) then we execute it (let us say another 1) then we expect 1 + 1 = exact result (i.e exactly 2). This never happens in real life or in a business as 1 + 1 can be 1.5 or 1.8 or 1.9 or 2.1 or even 3 or minus 1.
Mother: this is not making much sense.
Me: Last year before the mango season you had a plan to sell all the mangoes to the wholesaler as always. But because of the Covid lockdown, you couldn’t travel to the farm and most of the mangoes were stolen or some were destroyed by the birds. In this case, 1 + 1 was definitely not equal to 2 right?
Me: You made a loss last year so it was more like 1 + 1 = minus 1 or minus 2
Mother: hmm… now it is making sense.
Me: This year, again you were hoping the wholesaler would buy the mangoes but unfortunately again we had the lockdown.
Mother: yes but fortunately, you helped me sell the mangoes.
Me: this means, we came up with plan-B that was executed. I knew from the beginning that 1 + 1 will not be equal to 2, so this made me not get too excited with the sales that were happening as I was aware of the unforeseen expenses.
Mother: but at least we made some profit this year right?
Me: with your calculation, it seems more like 1 + 1 = 1.1 but you were assuming and expecting it to be more than 2.
I believe the reason you are disappointed is that you were assuming the profit would be more (in other words more than 2) but now after doing the detailed calculation you have realised it is way less than expected.
Mother: (took a deep breath and exhaled and said) hmm… now it makes sense.
This is what my mentor made me understand early in my entrepreneurial journey not to get too excited with just an idea or a plan or even with sales.
I still remember the words of my mentor who said “It is only for a Math teacher 1 + 1 = 2 but a business person 1 + 1 will not be equal to 2. The day you realise this is the day you can consider yourself to be slightly more matured as a business owner.
The day 1 + 1 will be more than 2, that is the day you can consider yourself to be successful in business because you have surpassed your own expectation.”.
So, the definition of success for a business owner should be, “when the results surpass their (business owners) own expectation.”
If you are a business owner when was the last time the results in your business surpassed your own expectation?
Was it a one-off thing or has it been consistent? If not, did you have plan-B and plan-C? How are those plans yielding results?
As a business owner, it is very important to accept the fact that things will never go EXACTLY as planned. If we start looking for this perspective we will eventually come up with plan-B and plan-B.
Again, these plans-B & plans-C may not go EXACTLY as planned. So, we need to closing monitor what’s happening during execution and accordingly make informed profitable decisions. This can be done mainly by knowing and understanding numbers!