I have touched previously on business owners’ frustrations. A lot of that comes back to a lack of a clear financial strategy.
When we start working with business owners, we often find they don’t have a clear view of their business’s financial health. It’s called a lack of financial clarity.
It might look like:
• Not knowing how your business is tracking
• Making decisions based on ‘How much money do I have in the bank’
• Often wondering, ‘Am I making money?’
• Experiencing financial surprise.
A lack of clarity with finances leaves business owners feeling anxious or stressed. People deal with anxiety in a variety of ways. Often it is through avoidance but avoidance has risks. It can unintentionally create more problems (not to mention anxiety) in the long term.
Having a comprehensive system of financial measures and controls will provide the necessary analysis and tracking of your key financial data. This includes analysis and reporting of profit, cash flow, debtors and creditors. It also extends to matters such as the key drivers in your business that ultimately drive profit and cash. Being on top of the numbers.
Simply put, a system of financial measures and controls will provide you with a very clear picture of the financial performance of your business. You will also understand where the problem areas are. You can develop a plan to remediate.
In short, you know on what to focus your energies.
It’s a pillar upon which you can build.