Why Bother to Measure it?

I know that sometimes measuring your operation’s Cash Flows & Cost Structure can be frustrating, especially when we are in challenging times, due to inflation and its overall impact. However, I would encourage you to hang tight to this monthly process for several reasons:

• As I have pointed out many times in the past, if you measure it, you can grasp a better understanding of your cash flow. If you understand it, you’ll get to “see under the hood” and thus know what is out of alignment. With this clearer understanding, you can achieve a better sense of control over your Revenue & Expenses. Of course, if you have more control, you can then make changes to improve your bottom line. For example, if a particular expense is out of line with your industry, or, at least with your historical levels, you’ll be able to understand why & determine if it is a variable you can improve…

• Often, I hear people suggest that they might be better off not knowing, especially when it looks rather negative. How? If your Cash Flow is negative, ignoring it won’t make things improve. In fact, if you delay “fixing the problem,” it could potentially get even worse, possibly to the point where it is beyond repair. We certainly do not want to get to that point. Even if your Cash Flow is strong, you should still be looking for ways to make it even better. Tom Brady was one of the best NFL quarterbacks of all time, but even at his highest levels of success, he continued to look for ways to improve his game!

• What if your banker asks for an update? Will you suggest that it is solid, even if you don’t specifically know? Do yourself a favor and be prepared to share your best information with him or her. They work diligently to provide you with the financing your business needs, so always be prepared to provide them with sound information & some assurance of your performance. There have been many occasions where a Client’s Loan Officer is completing a renewal in the middle of the year. Even if they have year-end financial statements from the Client’s CPA, they may just want to know what is currently happening in the business. This is powerful information to have at your disposal!

I have been completing regular monthly Financial Analysis to Clients for over 20 years. As a result, they have boosted their revenues and either reduced or maintained their costs at a level that has helped them grow & succeed. In summary, if you aren’t aware of these details, isn’t it a lot like watching a sports event without knowing the score, or, worse yet, flying an airplane without radar? Both can be dangerous to your outcome… If I can assist you with this process, please reach out at john@success-strategies.com. I’ll be happy to help you!

“Courage is resistance to fear, mastery of fear – not absence of fear.”

Mark Twain

Let’s take your business to the Next Level!