Do You Measure Up?

Not long ago, I had a meeting with one of my Clients and his Banker. We were feeling quite good about our YTD financial numbers, but we also wanted to touch base with her about some upcoming projects that we were starting to outline for future expansion.

Now, I went into this session thinking that we had, thus far, had a really good year. However, we were quickly reminded that this Client was still not in the bank’s top 10% in terms of profitability. After recovering from the shock of her comments, I reminded her that 90% of the bank’s customers were not in their top 10% for profitability… It was a mathematical fact.

However, I felt that it was better not to “win the battle & lose the war” by delving more deeply into this point. Thus, I shared a comparison of how far this Client had come. When we started with them five years ago, they had experienced several years of large losses, and they were now well on their way to a third consecutive year of solid profits. The best part of this discussion was that I had the financial analysis to prove it.

If you had been put on the spot like we were, could you have countered the Banker’s anguish with similar analysis? With the tight margins that have historically plagued the dairy industry, I suggest that you develop a system to track these same numbers.

Allow me to share three reasons to do this and obtain a firm grasp of your Cash Flows. First, why would anyone want to run a business and not know how they were doing financially? It is the “scoreboard” for your operation. To keep moving forward successfully, you must know how your operation is faring. It should be a solid source of motivation for you to make the necessary adjustments and continue getting better.

Second, it is good to be prepared if and when you are ever confronted by comments like the one we received at this bank meeting. I can hardly describe the joy I received in cutting through the misinformation and setting the record straight, based upon their true results… Having this information can also help if you ever need to find new financing.

Finally, think about the next generation of your operation. This is a challenging industry, and if we want the next generation of leaders to participate and make it even better, they will require a solid understanding of what they are getting involved in, because there are so many other opportunities available to them. Let’s help them as they seek to lead your operation forward to even higher levels. Remember, their success might even represent your retirement funding as they take the lead.

Financial analysis is one of the key areas that we focus on at Success Strategies, Inc. If I can assist you with this process, please let me know.

“The future belongs to those who see possibilities before they become obvious.”

John Sculley, Former Apple & Pepsi CEO

Let’s take your business to the Next Level!