Most business owners check their P&L each month without understanding how it's built. If your chart of accounts isn't properly engineered, your P&L is like a compass pointing the wrong way, giving you false confidence in numbers like "marketing is only 5% of costs."
There's a lot of listeners to this podcast that might say, well, I don't know if that really applies to me because I do look at my P&L every month. Yeah, I do have a GPS. But I would call in the question, how is it calibrated? You know, meaning, you know, if east is west and north is south, now you got a compass, but it's not working. You know, something's broken in it. And most people's P&L, and we know this just through years of experience, and even most recently playing business coach in a lot of these companies, these P&Ls are all completely discombobulated. People generically think, well, here's my P&L. How do you You know, it's correct. Well, my bookkeeper pulled it. What do you mean? There it is. And they have no idea how it should be engineered in terms of— I say engineered, meaning how it should be organized, the chart of accounts, how it should be categorized and what have you. And consequently, you know, we see owners and they do this with the most sincerity, right? Meaning they're very— they're not disingenuous. They're saying, hey, Mark, honestly, my marketing cost is only 5%.
