Several years ago, I remodeled a small bathroom off our kitchen when we lived in Moberly, Missouri. Thank God for Westlake Hardware. I bet I made a dozen or more trips to their store to keep getting parts I needed to complete the job.
And I got the job done–in about two weeks. An expert could have done the job in half a day. I had book knowledge. The expert has tacit knowledge. That’s the advantage they have over DIYers.
The same goes for drywalling. I don’t care how many YouTube videos you watch on finishing a home gym with drywall. You’ll never get the job done better or faster than an expert. And that’s common sense knowledge. But the term we probably can’t recite for their skill is ‘tacit knowledge’.
And that brings me to the topic of financial management. The people over at Business Explained have thrown together a book on financial management that’s nothing more than a regurgitation of the issues covered in a 101 college course. There is zero tacit knowledge baked into any of the pages, which I’ll show you later.
The best way to learn financial management is to have a person walk you through the process. Remember the G3 way of the mastery journey: learn, practice, improve. The starting point is not a book. It’s a person with tacit knowledge who gets you from point A to point B based on your existing skills, the tools available, and your drive.
In this article, I will review the Rule of Three in small business financial management. Sorry, there will be nothing on the weighted average cost of capital, capital structure theories, or dividend policy decision-making.
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