During the last 10 years, I have owned four successful businesses. My strength appears to be growing businesses, but my weakest skill has always been the financial part. Fortunately, I hired a business coach early on who made sure that I focused on having financial measurements.
Having a financial measurement process in place has helped me to be successful and, more importantly, feel like I run a good company. At the end of the month, I can’t wait to see what these measurements will be, whether negative or positive, so that I can determine what strategies are working and not working.
It isn’t just that I review these reports, but that I also track the key ones such as revenue and profit against year-to-date and monthly goals. This includes the use of graphs so that I can visually see where we are and post results so that my team can see our progress, too.
Here are some questions I ask myself to ensure I have solid financial measurements:
- What type of financial information is critical to my success?
- How can I produce that information accurately?
- Is my accounting department using the right tools (software) and booking expenses/sales accurately?
- How often do I need to review these reports?
- How can I put the information into a visual format to measure results vs. goals?
- What resources do I have to help me with financial issues?
I am not just interested in running a business that makes money; I want a company that is also professionally run. To me, a financial measurement process is an important step to achieving both of these goals.