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Better financial habits that lead to better business

April 14, 2016

All successful businesses have some things in common. Here are two: they stand on a firm foundation of strong operations and reported financials. Success in business is measured in one language only: numbers. Whether it’s guest or patient count, cars sold or tuned up, pets groomed, cakes baked or flowers delivered, success in business is told in numbers. We may all sell different products and services, but we all speak the same language: numbers. Have I hammered enough on numbers yet?

1. Keep Score

Business strength shows up on the bottom line. How do you know if things are going well? You continuously keep score just like in sports. Can you imagine a football game where there were no points, timing, penalties or quarters? The numbers tell the coach and players where they are at any given time to help determine the winning strategy.

The same is true in your business: When you keep score, with daily sales, taxation, comps, payment media (credit cards; cash; gift cards) and sales person reports, you can immediately see what needs adjusting and what can be leveraged for the largest gain.

Keep in mind anything measured improves – but – go one step beyond to get to the real magic: Anything measured – and reported – improves even faster! In your business, reporting your numbers helps them get better. Does the coach sit by himself at half time? NO! He gathers the team, they all review the numbers and agree on a plan to move forward. It’s one thing to KNOW, it’s another to DO, so, now take action. While reporting numbers is critical, execution trumps knowledge. Take immediate action to improve your business.

2. Systems & Set Asides

Today, far too many independent business owners still use the shoebox, grocery bag and online check register method of financial management. I see it all the time and it makes my stomach turn. Get – and keep – your financial systems in order.

How can you see the scoreboard if it’s in a paper grocery bag? Whatever system you’re using, use it daily and set aside what your operating plan including a budget (I know I just said the “B” word) says you need to meet your obligations weeks and months down the road.  Cash forecasting includes those pesky things like replacing equipment, paying payroll or contractors, leases and loan payments. If you’re out of your league on this stuff, hire a professional and don’t look back.

My businesses soared when I made the shift from personal to professional financial management. The right professional pays for themselves!

3. Build A List What?

This isn’t a financial task – or is it? IT ABSOLUTELY IS!

There are many strategies to improve revenues (obviously, a financial function). I believe the single highest value activity you can do as a business owner is marketing – and building a list is the most important of the marketing tasks. I’m putting the list building in the financial category because I want you to understand the vast importance of it. When you’ve got a list of guests who have opted in to your list, you immediately go from annoying pest to welcome guest. You can then invite your members in more often, build a relationship with them and be the “go to” place when they are thinking of where to spend their money. Don’t delay on building a list. Without one, you’re just a dinosaur waiting to go extinct.