2020 has caused huge financial damage to our country, but all is not lost: we’re now starting to rebuild, and there are plenty of opportunities to thrive.
So, I’m going to start with a hard truth: in my experience, most small-business owners don’t fully understand the importance of the numbers in running their business. Most of them are brilliant at offering an excellent service or product and spend most of their time crafting smart strategies and innovative products, but they end up sticking to those strengths and devoting all their energy to them. The majority of these owners don’t pay attention to the numbers behind the product plans, and they don’t carefully review their financial information regularly. These small business owners end up managing their business based on what they’ve got in the bank account, but they don’t analyse trends or seek insight and rely on limited and short-sighted planning.
Several of those owners know that the numbers are significant, but they find it challenging to access these numbers when they want them, and they don’t really know what the numbers mean. This may sound harsh, but there are even some accountants who are at fault (sorry, but it’s true). It’s become way too common for accountants to provide monthly management information long after the reporting period. By that time, the numbers are cold and are of little value.
So, what does that mean for you? You need to ask yourself tough questions: are you carefully analysing your numbers regularly? Are you seeking insight into what decisions you should be making, and when? If you aren’t, don’t worry; we’re going to help you fix it. And if you get it right, your business will thrive. You’ll be rewarded with agility, and the ability to make better business decisions in real time that’ll set your business apart from the competition.
Here are three decisions you need to take to achieve that objective:
- You need to utilise Cloud Accounting. Could Accounting software like Xero automate all your business tasks and processes, taking all the admin and legwork out of your daily workload. Once you’ve paired this automation with a disciplined bookkeeping routine, you’ll be able to access your financial information at any time, from anywhere, using any device. That kind of oversight will help you run a much leaner, meaner company, and crucially, it’ll save you money, effort, and most importantly, time.
- Create Customised Digital Dashboards. Digital dashboards provide at-a-glance views of the key performance indicators of your business. These dashboards are housed in the cloud, displayed in on the web and updated in real time—so you have access to all the insight you need, wherever you are. You can also set up automated alerts so that you receive critical information in the quickest, most effective way, and so you take corrective action immediately.
- Recruit A Virtual CFO. The integration and interpretation of financial information and sound financial planning are not skills that come cheaply, but they’re critical to the future success of your business. A virtual or part-time CFO model allows for access to specialist, experienced and independent financial resources that you so desperately need, but at affordable rates.
If you’re struggling to make sense of your business numbers, or you feel like you’re running your business blind, it’s time for a change. Like business consultant Peter Drucker once said: “You can’t manage what you can’t measure.” And to take that sentiment even further, Michael Dell of Dell Computers adds: “Anything that can be measured can be improved.”
The bottom line? You need to use the right tools for the job, and to make sure you measure everything you do. If you need some help to set this up: give us a shout, we’d love to chat. These are the challenges that inspire us and lead to our best work and your best results.