Written by: Linda Dent, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
Is your business built to last?
One theme that runs through all my coaching sessions is the fact that business owners are not able to quantify their financial success. Ask yourself these questions:
Do you have a target for Revenue this month?
Do you have a target for Expenses this month?
Do you know if your marketing spend is producing the desired results?
Can you tell me what your bank balance is right now without looking?
Do you have a dashboard of the most important figures to track?
Reflecting on this, I concluded that either the business owner is uncomfortable with bank statements, accounting, and excel spreadsheets or they just have not realized how important it is for the business owner to know their own numbers.
90% of small businesses fail within the first two years!
Whilst many reasons could be found for this failure, and I believe that not knowing your numbers is a high contributing factor.
“Though it's cold and lonely in the deep dark night, I can see paradise by the dashboard light”
This is a line from Jim Steinman’s lyrics in the song by Meatloaf.
It’s about two young lovers planning to go all the way.
I assume that most small business owners want to go ‘all the way’ to business success and a bright future.
What happens if you don’t set targets?
Well, first of all, no target means no direction, no focus, and to focus on everything is to focus on nothing.
If you step up to the archery target with no training and no practice, draw your bow, close your eyes and shoot, chances are arrows will land all over the place, and you will never hit anything.
You will not beat your competition that way, and people will write you off. You will fail at archery.
If this is your business, it's like selling to everyone, no target market, spending indiscriminately on the next cool idea, getting into debt, losing your best employees, and watching your business wither and die.
But that’s NOT you
Running a business doesn’t have to be hard, but, like archery, often the fun is in hitting the target not just once but many times. Celebrating the wins with your team feels great.
So what are those simple secrets:
Step 1: Work with your accountant to figure out a Revenue and Expense trend over the last 6 months.
Step 2: Estimate the Revenue and Expenses you can expect for the next 6 months taking account of any changes – new hires, new product launches, expenditure on new machinery, or price increase from suppliers.
Step 3: Set realistic but higher revenue and lower expense targets to aim for.
Step 4: Figure out what actions you need to take to get there. What are other numbers important in your business? Number of leads? Number of new clients? Number of lost clients? Average revenue per customer? Return on Investment? Debt to Equity ratio, Stock turnover etc
Step 5: Create a dashboard of the most important ones and track them daily or weekly, review monthly and amend your tactics where necessary.
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Finding Paradise
Business ownership can be ‘dark and lonely,’ but with a dashboard to illuminate the way, you can reach your own version of paradise.
Finding a business partner or coach that you can trust to have your best business interests at heart, guide you along the trickier parts of this exercise, helping you to reach those targets is one way to success.
Valued Insights, Focussed Action
Reach out for a Virtual Cuppa with Just Ask Linda to have a conversation about this article and my simple 3-step coaching process for business owners who want to build businesses that fund their dreams.
For a free 1PageStrategicPlan template, send your name, business name, and email address to me at linda@justasklinda.co.za.
Connect with me on Facebook, YouTube, LinkedIn, LinkTree, and visit my website. Read more from Linda!
Linda Dent, Executive Contributor Brainz Magazine Linda is a Business coach with a solid background in the Banking Industry. She believes in building businesses through long-term relationships and a partnership approach to grow and empower the small business owner through planning, actions, and regular reviews of actual results vs. planned results. She is the Founder and CEO of Just Ask Linda Business Coaching, which was born out of a desire to Grow, Learn, Empower others and Enjoy her work, her very own GLEE philosophy. From understanding your unique strengths and how they apply to work, establishing where you are now and where you want to be in your business, getting to know your numbers and setting goals, managing your time, or rather how to do more of what you love each day, building a loyal team of employees or just listening to the business owners’ major business challenges and offering up new thinking, you can Just Ask Linda. If she can make a difference in a business owners’ life, helping them overcome Money, Time and Team challenges to grow a successful business and share some part of their business journey; then she will be full of GLEE. Owning a business is an adventure, and she loves the one she is on.
