So many entrepreneurs just don’t know where they’re starting from, and end up taking inefficient and ineffective action to get to where they want to go. For many, the first glimpse of their past year results is when they have their taxes done, which I have found in my 20 years of preparing tax returns for small businesses to be 4+ months after their year-end and into their current fiscal year. But how can you get a good handle on your strategic action plan for a successful year if you don’t even know where you’re starting from?
That’s why I feel Step 2 – Knowing where you are now, financially, systematically and operationally, is an essential step in the process of creating your strategic action plan for success. This means you’re going to have to get organized with your financials and conduct a little internal assessment of where your are now in your business.
Once you have a good picture of your current financial situation, skills and resources, internal controls and risk management practices, you can figure out what you’re missing and need to put in place (Step 3 – Analyze the gaps between where you want to go and where you are now) in order to effectively build your action plan for how you will achieve the goals you set for your business in Step 1 of the 8 steps to create your road map to success. (By the way, If you missed my 8 Steps to Building your Road Map to Success post, or last week’s post on Step 1 – Start with the end in mind, you can get them HERE.)
Statistics show that 85% of business failures are a result of improper organization and planning. So why is it that so many entrepreneurs don’t have their records organized and up to date? Some of the reasons I hear are: not enough time (and no one to help), not knowing how, and outright fear of money and finances (YIKES!).
On of my clients, Susan, recently shared with me that 2015 was her best year in a long time, that she had a lot of growth in the fall, and that a big part of that success had to do with me helping her to change her mindset about finances and understand her financial numbers in a strategy session we had back in the summer. She had long been tracking, monitoring and using her marketing and social media metrics to gain more traffic and clients, but had fallen short of using her financial metrics effectively to grow her profits and cash flow. As she put it, finances scared her, so she ignored them. I helped her see that they weren’t scary at all (and in fact, they could be her best friend) and showed her how she could use her financial metrics to make more effective business decisions based on what her numbers were telling her. So kudos to Susan for using her new knowledge and mindset to create a great year!
If you find yourself resisting the task of getting your finances up to date and organized, or if you just struggle with tracking and understanding your financial numbers, I can help. Contact me to set up your complimentary Business Clarity Breakthrough session to discuss a strategy for success with this essential step in creating business success, and ask for my Business Management Assessment Questionnaire.