AI Has Read Millions of Business Books. It Has Never Owned a Business.

By ProfitWise - a Visa Business Plans company

AI can explain how to price a product, calculate margins, prepare a forecast, and analyze financial statements. Give it enough information about a business, and it can produce an impressive analysis in seconds.

We use technology ourselves, and there’s no question that the tools available to business owners today are extraordinary.

Still, there’s a difference between knowing how a business is supposed to work and having actually owned one.

Anyone who has run a business for a long time knows that decisions rarely arrive as neatly as they do in a spreadsheet.

You may know that hiring another employee makes financial sense, for example, but still need to decide whether you’re comfortable adding another salary when one of your largest customers represents a significant portion of revenue.

Or the numbers may tell you that raising prices would improve margins, while your experience with those customers tells you that a 10% increase all at once could create a very different problem.

Neither decision is purely financial.

This is something we understand particularly well at ProfitWise. Our experience didn’t begin with bookkeeping or financial reports. ProfitWise grew out of decades of actually owning and operating businesses.

That experience changes the conversations we have with clients.

When we sit down for our monthly meetings, we’re obviously looking at the numbers. But we’re also listening to what’s happening in the business.

Maybe revenue had a great month, but the owner tells us one unusually large customer drove much of it. That changes how we look at the increase.

Perhaps profitability declined after the owner hired two people. On the financial statements, that may initially look concerning. Once we understand that those employees were hired to support a new contract that is just getting started, the numbers have a different context.

That’s why these conversations matter.

Over time, we learn how the business operates, where the owner wants to take it and what concerns them. We also see how previous decisions actually played out.

That history becomes valuable when the next decision comes along.

At ProfitWise, our bookkeeping clients meet with us monthly to review what’s happening financially. For clients who need a deeper level of support, our Fractional CFO work takes those conversations further into forecasting, analysis and larger business decisions.

In both cases, judgment matters.

It matters when you’re reviewing the bookkeeping, and something doesn’t look right. It matters when you’re trying to understand why profitability changed. And it matters when an owner is considering putting a significant amount of money into an expansion and wants another perspective before making the commitment.

Sometimes that perspective comes from the numbers.

Other times, it comes from having seen a similar situation before.

That’s the part of business experience that’s difficult to put into a formula. After years of owning companies, you remember the decisions that looked great on paper and didn’t work as expected. You also remember the times when taking a calculated risk turned out to be exactly the right decision.

Those experiences don’t make anyone infallible. Business owners know better than anyone that no one can guarantee outcomes.

They do, however, change the questions you ask.

AI will keep getting more sophisticated, and we think that’s exciting. Better tools give business owners and financial professionals access to information and capabilities that were unimaginable not long ago.

We intend to use them.

But when someone is deciding whether to hire, expand, borrow money, change prices or invest their own capital, the calculation is only one part of the conversation.

The other part comes from experience.

And there’s still no substitute for having actually been there.

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