I’ve written about money being the essential feedback loop in any business. There’s a second, just-as-important piece to having a finger on the pulse of the financials: for anyone interested in justice or equity in their business, understanding the financials is the key to modeling social change in your business.
If you’re interested in experimenting with post-capitalist or alternative models to the status quo of extractive, exploitative, and exhausting business models– ie, your goal is something more than just trying to make a lot of money for yourself– financial knowledge provides the tools for channeling resources in alignment with values.
There’s a set of values that leads to Billionaire’s quintuppling their wealth during a pandemic. There’s also a set of values that leads to distributing profits to workers.
A business is a repeatable process that makes money. A business is also an ecosystem that creates channels and relationships for redistribution of resources; for building robust livelihoods; and opportunities for challenging systems of oppression.
Here’s a short list of a few things that are hard to do without understanding how money moves:
~ Distributing profits to workers
~ Regular donations and reparations
~ Paying yourself well and enough
~ Paying employees well and enough
~ Offering awards and scholarships
~ Funding other business owners
The other thing you won’t have that’s mission critical: Transparency.
Transparency enables power sharing.
You know who reliably pleads ignorance of their finances? People accused of money laundering, tax evasion, and all sorts of financial fraud.
Folks that don’t know what’s going on can’t be transparent; folks that can’t be transparent are at greater risk for causing harm. While knowledge is power for sure, financial knowledge is the key to power sharing and harm reduction.
Over to you:
What’s one question that you have about the story your financials are telling?