The language of business

I was in the Army when I first heard the expression, “The best way of learning something is to teach it”. Another expression I like is that, “you don’t truly understand something until you have to explain it”. This is especially true when you have to explain it to a child. So last week I had this conversation:

Me: “Hi Honey”
Nine-year-old Daughter: “Dad, you know when you go to work”
Me: “Yeah”
Daughter: “What language do you speak?”
Me: “Umm… What do you mean?”
Daughter: “Well, I heard on the TV someone saying ‘the language of business’ and I was wondering whether it was French or something because we do that at school?”
Me: “Umm…”

I decided to think about this before I came up with an answer. Drawing on my experience in finance, technology, marketing and entrepreneurship, I decided that business consists of two languages: emotion and mathematics.

Firstly emotion

Emotion drives every transaction. I have a tall Canadian friend who says it always come downs to fear, greed, sex or real estate. But basically nothing happens unless you want it to happen due to aspirations or wants. Consider your last car, the model, style and configuration – it’s what it says about you. Consider government policies such as the BER, it’s about calming fears about the GFC. Consider the sandwich you bought at lunch time, it’s about making you feel better. Even when we think we are using our intelligence, I would assert its only ever to rationalise an emotional decision we have already made – consider almost every new job hire ever made.

And then mathematics

Mathematics is used for measuring every transaction or proposed transaction. It doesn’t matter whether it’s break-even point, profit, demand elasticity, net present value, the budget or economic reorder points. Underlying every transaction is mathematics to propose what can be done or record what has been done.

I explained this to my daughter, then went through an example talking about selling lollies at school. She got the fact that people love them more than wholemeal salad sandwiches so we would sell more, and she got the mini profit and loss statement too. She didn’t get the mini balance sheet though, but perhaps that’s no surprise on her first go at age nine.

I discovered I really enjoyed working through the selling lollies exercise too and in fact, the whole process gave me insight as I had to distil the essence of business for her. So much so I think I might start a small business with the kids next year as training for them, and for me too.

To read more Brendan Lewis blogs, click here.

Brendan Lewis is a serial technology entrepreneur having founded: Ideas Lighting, Carradale Media, Edion, Verve IT, The Churchill Club, Flinders Pacific and L2i Technology Advisory. He has set up businesses for others in Romania, Indonesia and Vietnam. Qualified in IT and Accounting, he has also spent time running an Advertising agency and as a Cavalry Officer with the Australian Army Reserve.