I hear this question from clients a lot at the beginning of the year. Everyone wants to grow their business and find the fastest way to do it. Spoiler alert: growth may not be what you should be focused on right now.
The goal is not to get big. The goal is to create sustainable success, stable cash flow and profit.
Many have bankrupted their businesses when trying to grow them.
BIG does not equal SUCCESS. Cash in the bank, bills paid and happy customers mean success. Not size.
Here are 5 tips to help your business succeed.
Tip #1 - learn the language of business
The language of business is accounting. If you can't speak the language, you can't expect to win. Spend some time learning about numbers and how they
Tip #2 - what are your businesses numbers telling you?
Your accountant and bookkeeper should be providing you with 3 "report cards":
balance sheet the income statement, also known as the Profit & Loss Statement
the cash flow statement.
Every number on these report cards are a RESULT of some activity. What activities need to change to produce better results?
"If you can't read the scoreboard, you don't know the score.
If you don't know the score, you can't tell the winners from the losers." – Warren Buffett
Tip #3 - Sit down with your bookkeeper and review every number in the 3 score cards
Yep. All of them. Look for things that are out of place. Did a number or transaction surprise you? Did you forget you were paying for something every month and it is still showing up in the books? Analyze the numbers compared to last year, last quarter, last month.
The Cash Flow statement is the one score card that tells you how the business used it's money. Do not skip this one.
Tip #4 - Meet with your accountant /CPA on a quarterly basis
Discuss tax strategies. Show him/her the profit number so they can suggest strategies BEFORE year-end if you are making money.
Tip #5 - Repeat.
Lastly, knowing your numbers can go a long way in helping your business succeed. You can learn more about your numbers in our guide: Monthly Financial Review Checklist. Here is a link to download it: https://www.dianamiret.com/
If you cannot measure your results, you will either continue to struggle or you will fail because key information goes undetected.
I would love to hear your thoughts on this blog. Leave a comment below this post.