Take care of your money – isn’t that more motivating than “financial management”?
You’re busy. There’s a client issue to solve. You’ve got to follow-up with that potential client you met yesterday. Your employees, even your leaders, are clamoring for attention. There’s money in the bank. Your accountant is good. Income statements and spread sheets are time consuming and require focused attention – maybe tomorrow evening you’ll have some time, or maybe next week.
I know.
It doesn’t always feel productive to work on the financial minutae.
And it’s complicated.
Here’s my advice: If you haven’t done so already, figure out:
- Where is my profit is coming from? (by client, by product, by service type)
- How do my cash flow and that bottom line on my income statement relate?
- How do my budget and cash flow projections for the year compare to reality each month?
Do those 3 things. Get as simple as you can!
It’s not easy, and can take a year or two to really get in shape. Be patient.
Keep asking yourself, your team, your accountant, how you can most simply answer those two questions. Get it on your scorecard.
Over time, you’ll gain perspective on one of the two most important things your business stands on (the other one is people).
I know, from my own businesses and from helping my clients through this process, that when you can answer these 3 questions– annually, quarterly, monthly, even weekly:
- You will build your “ability to predict” muscle as a business
- Profitability will increase
- Your team can make spending decisions wisely
- Peace of mind will free leadership mind
- A sense of control will return
That’s a lot of return on your investment of attention, time and energy. And the best thing is that once you’ve got the system in place, your money worries become much less of a distraction.
