Business is about money. Without money no business can realistically survive. Yet very, very few of us small business owners understand anything about money. Most of us have a somewhat vague knowledge of the subject, and an even vaguer relationship with it. Maybe that's why most of us struggle on, rather than prospering; why 50% of us startups don't survive the first 12 months; why as many as 96% of us don't survive the first decade?

To complicate the issue immeasurably, most of us are decidedly ambivalent about our feelings towards money. Lets analyse that a little.

Which makes you feel better on the 23rd of the month?

A: Empty pockets.

B:  A herd of blue rhinos in one pocket, backed up by a sheaf of orange cheetahs in the other?

Answer: Not A!

So why do we get so confused? Somewhere in our upbringing there is a common belief that it's better to be poor than to be rich. Poverty is, somehow, more noble. If you're rich you must be a thief, a crook, or worse - a business owner!

Let me cite a few examples.

I'd rather be poor and happy than rich and unhappy. I have NEVER heard a rich person say that.

Money doesn't buy everything. Duh!

Heck, even the Chinese have some wisdom on the subject: A man seldom gets rich without ill-got gain; as a horse does not fatten without feeding in the night. (I mean no disrespect when I say that I don't even begin to understand that, except that it seems to be somewhat disrespectful towards my hero: you.)

This ambivalence towards money makes us feel awfully guilty when we make a decent profit - as if it's something to be ashamed of. You will notice how unashamed the MD's of JSE listed companies are when they announce record profits. They know all about money. (Most of the successful big listed firms are run by accountants, rather than engineers, techies, ex cops, plumbers, and other fine people.) And they know that the more money they make, the more people they're helping, and the more people they can help in future.

Money, dear friend, is good. It's not your enemy. It's the reason you're in business. It's the scorecard. It's the reward you take home for the risk you run in relying on just yourself to win in this entrepreneurial game, in addition to your daily wage as a worker. Which is why it saddens me so much to see so many of us barely scraping our daily wage, let alone a profit. (If you're one of the lucky folk who, today, carries enough cheetahs in your left pocket to kill the bucks needed to pay the monthly bills this month end - then ignore this email and keep on counting my brother. (Or sister, if you prefer.)

Any time invested in learning about money: cash flows, interest rates, profit margins, taxes, amortization, mortgages, stock markets, derivatives, swaps, ... (I have to stop. I am getting a hot flush.) is time well spent.

If I may close with a simple balance that cuts to the quick of this issue? Jonathan Swift said " A wise man should have money in his head, but not in his heart."

January 31, 2006

Peter Carruthers

Umhlanga Rocks, South Africa

PS If you still retain any doubts about how desirable money is, consider how happy the government is to take a goodly portion of your daily wage and any profits for their own use. Your country demands that you prosper!