On the Road to Revenue: Treat Money
How you Drive
Who doesn’t love a good metaphor? When it comes to making profit and saving costs in any business, we like to use the analog, “treat money how you drive” – that is, with a short view, long view and rear view.
Now, with any and all guidance, we recommend making this applicable to your business’ unique goals and road to “revenue”. And, of course, we are happy to help you build a roadmap of sorts to get to where you’re going, as safely and as wisely as possible.
Naturally, the most time spent driving is looking forward. And, while wanting to look far in the distance, we are only going to get where we are going one mile-marker and pit stop at a time. That said, we recommend starting with a short-term focus on the future, so that your financial goals line up with your company’s long-term expectations.
The benefits of short-term financial goals are vast. Here are just a few reasons to treat money as you drive your business to its next “goal”.
- They are simpler and easier to accomplish. In an ever-evolving economy, things can change drastically. (Need we reference 2020?) That said, a clear, concise goal to meet or exceed can be done with a greater likelihood and any changes won’t break the bank when expectations and economic trends take a swift detour.
- Short-term financial goals are a great way to create momentum. These small, incremental wins can definitely motivate a team in its entirety and keep everyone on task, from one money-making milestone to the next. When you treat money how you drive, you can use one goal to help fund the next short-term business objective, inching forward and staying ahead.
- They provide you with instant feedback to measure your business’ performance and progress. When it comes to business, we all know it takes risks at times. Trying new programs or protocols that you believe will save money or make more profit. However, you must be able to measure the results of your team’s efforts. This helps to ensure practices are worth continuing, optimizing or cancelling altogether. Fortunately, when you budget for short-term goals, you can commit amounts that work with your marketing budget without breaking the bank or going so far in the red you cannot recover. In fact, According to a U.S. Bank study, 82 percent of business failures are due to poor cash flow management, or poor understanding of how cash flow contributes to business.
Financial planning helps businesses identify long-term financial success. See the following reasons why:
- Financial plans provide a guide for action and decision-making. Business mission and vision statements help you plan a trajectory for what “success” means to your operations. Financial plans can do the same. Especially long-term. When you have an idea of where you want to take your business, you can tailor your mission, vision and objectives to aim for the respective level of accomplishment.
- A long-term financial plan reduces uncertainty around finances which provides clarity and confidence in your team members. Staff is far more likely to work toward a goal that they know and understand, especially when job security is promising and finances are in good shape.
- You can make educated decisions when you have a long-term financial plan. Having an understanding of what things are needed to protect and establish yourself and your staff financially is very important for long-term revenue and retention.
Treat money how you drive. Just as you would commuting to any destination, you’ll want to occasionally check the rear view on your finances. Here’s why.
- First and foremost, looking back at past financial statements can obviously show gains and losses. The process of auditing past financial records offers the opportunity to review your statements and highlight any problem areas. This, in turn, gives you a chance to correct those issues moving forward in the fiscal year. From the perspective of shareholders or potential investors, a company that regularly audits their records lends credibility to your business or organization.
- Looking at past finances can highlight spending behaviors that are detrimental to your business’ bottom line. Whether it is mismanagement of funds or even paying automatically for subscriptions you are no longer utilizing within your organization.
- Naturally, you won’t be able to focus fully on where you’re going if you keep too much attention-to-detail on the past. Either mistakes or milestones. Remember to set new goals and occasionally revisit what you’ve done well for the sake of motivation. Do this while also setting new financial goals to achieve.
You wouldn’t safely or effectively navigate to your desired point of interest without directions, decisiveness and resources to get you there. Look back at progress and potholes. Look forward to the next pit stop to refuel. And glance further along to map out a successful course. These are the staples of any quality commute or company objective.
Equally, we can help you with your business’ desires to meet and exceed monetary milestones by looking at your books and gathering a game plan for the way forward. Call us today to schedule a free consultation and get your company on the fast track to its financial road to revenue.