If you are like a lot of business people, my Clients included, you have to be feeling pressured with the impact of inflation on so many costs. These include fuel prices, which, frankly, could be improved with clearer thinking and less political drama. However, it also includes items such as labor, insurance and just about any type of supplies or building materials.
If you aren’t feeling the impact of these rising costs and the painful rise in interest rates, as a result of the Federal Reserve Board’s efforts to control inflation, you are truly “living a charmed life…” It appears, as I write this, that the Fed is gaining better control over inflation, but, unfortunately, it is still at the highest level we have seen since 1980. Yet, the unfortunate thing is that once we incur these price increases, they will likely stay with us for a long time.
Thus, it becomes imperative to budget for these higher costs and then manage them as much as possible. Where do we begin? My Business Coach Dan Sullivan, co-founder of the Strategic Coach organization, said, “All progress begins with telling the truth.”
What is he saying? Specifically, he is stating that we need to clearly identify where you currently are in terms of costs and the offsetting revenues you are producing in your business.
Please recall that in prior writings, I’ve suggested that if you measure something, you can understand it. If you understand it, you can control that item, and if you can control it, you will be better positioned to improve it.
The specifics of these revenues and expenses, mentioned above, represent the Measurement part of this success formula. Once you have measured them, you can obtain a better Understanding of them, providing you with the ammunition you need to positively Control them. It will give you the detailed information you need to analyze your cost structure, in comparison to your available revenues, and make changes that can Improve your business’ bottom line results.
Will it be perfect? Probably not, given the variables I listed at the beginning of this article. However, it will position you to complete regular monthly comparisons of your Budget vs. Actual results and then make changes, as necessary. Additionally, if you set out some written goals, create action commitments related to them, and share these with your business partners, banker and employees, you will have created an “Accountability Team” that will help keep you on track. The benefits of this process can be enormous!
What I find especially appealing is that when you implement this process, you will be the greatest beneficiary of these steps. While it may sometimes appear that your banker, for example, is consistently hitting you with MUSTS, an acronym for “Making Up Stuff To Scare” themselves, they really do have your best interest in mind. Your Banker, your Vendors, your Family and your Employees all want you to succeed! And, I do, too.
Can I assist you to be more successful? If I can help you on this, please contact me.
Let’s take your business to the Next Level!