March 1, 2016
Financials are deep secret top classified
None of your business
I happened to speak with a supplier at Congress, who confirmed something I have known for years. That American business owners will freely disclose their exact revenues to anyone that asks, even strangers. And that Canadians universally will not.
My son-in-law Tomás is from Mexico; his framing crew works in the GTA residential construction sector. While differences between Canada and the U.S. can look dramatic to natives of either country, the canyon between cultures must seem far wider to him.
Tomás is currently teaching his trade to a 19-year-old from Brampton, Ont. Things are going well; Tomás has a talent for understanding and bridging the culture gap. Always polite, open and good-natured, he uses the word “reserved” to describe Canadians.
Still wondering about the Canada/U.S. attitude split when it comes to numbers, I talked with J. Paul Lamarche. Now retired, Paul has financial consulting experience with hundreds, maybe thousands, of landscape companies in both Canada and the States. In fact, he served as a mentor himself to most of the industry’s current business management consultants.
Paul agreed that business owners are far more open about numbers south of the border. Why? He thinks Americans are more optimistic and hopeful. That lower numbers are not any disgrace, because they know sales will improve. He described a financial roundtable at a SIMA show, where participants brought their actual numbers for a workshop — a scenario that could never take place in Canada.
When faced with low numbers, Canadians tend to be embarrassed, according to Paul. Many are incredible craftspeople, but not so talented in managing productivity or sales. He says far too many owners provide more income to employees than they receive themselves. They want the prestige of business ownership, but cannot support their success with real numbers. Hence the secrecy.
What about the successful players on the other side of embarrassment? Why are they also reticent? Again, Paul thinks it’s all about attitude, that Americans are more approving of success. “Say you buy yourself a big, fancy new car to drive around. In the States, you get a thumbs-up. In Canada, folks are more likely to think, ‘Look at that bozo, what an idiot.’” He believes successful Canadian business owners may avoid flashy new cars to avoid requests for raises.
Paul speculates that being so tight-lipped about finances might indicate lack of trust. He says the attitude comes at a big cost: it discourages mentorship.
Benchmarking can happen formally or informally, but there is no question that access to solid financial information drives prosperity for the industry. Could Canadian business owners profit from becoming a little more like Mexicans?