Nuts, bolts and priorities
5/22/08 at 11:10 AM by Frank Coker It’s just like being a parent and managing a household. Everything needs to be a number one priority. Things that get neglected will generally require a much higher price be paid at some point in the future.
So from the business owners point of view, everything is a high priority. But the real trick is knowing when to take action.
From a financial perspective, its important to know the difference between accounting (which is all about keeping current on bills and invoices and track of data which is only has historical value) and financial management (which is all about looking forward; using historical data to model, forecast and plan the future). Most business owners and managers learn how to do an adequate job of accounting or they hire someone to do that part of the job. But nobody can really do the financial management job for the owner. They might be able to do some analysis and prepare some reports, but that is a long way from financial management.
One of the ongoing highest priorities for a business owner is to decide where they want to take the business and then decide exactly how they are going to get there. This is often simply called business planning and sometime strategic planning. But in the end this is all about deciding on rates of growth, markets to serve, profits to be made, competitors to out maneuver, and investments to be made. If this is planned and executed well there will be an ROI – a return on investment. If it is not well thought out and not well executed, there will be tough lessons to learn. Then if the lessons are not learned, the cycle will repeat itself and the owner will often wonder why this is happening and not realize that their choices are creating their outcomes.
To move a company forward involves a continuous process of setting goals and each time hopefully raising the bar. Then goals must be translated into action plans, specific measurements, milestone dates and key dates for making go/no-go decisions. If this process is missing it is unlikely that a business is going to grow and be successful. The key is to grow intentionally and methodically. Plans need to be written, visible, reviewed frequently and progress must be monitored and measured on consistent intervals. Without these pieces there really isn’t a grounded plan. Without good grounding, planning can be a waste of time.
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For a short while I had thought about remaining a one-man band, but finally made the decision and commitment to build a company. Once that decision was made my highest priority was to take a closer look at our financial picture. Corelytics has helped me confirm my hunch that we could grow. It also has helped me set realistic, but challenging growth goals. Thanks for making my business growth your priority too!