A prospective client, chagrined that her business wasn’t growing the way she wanted it to, decided she needed to create a financial plan and called to find out if I could help.
“You’ve come to the right place and you’re doing the right thing,” I told her. “However, before you can plan for the future, you’ve got to get a better idea of where you’ve come from, and where you are now.”
What she knew was that her income was highly inconsistent. “We just pay ourselves with whatever’s left over,” she told me.
“How do you know it’s left over?” I asked her. “If you’re not clear about how much money is coming into your business, how can you be sure you’ll have enough to run it next month?” The truth was, she couldn’t.
The good news was that she had kept reasonable records for the first five years of her business. Looking over her numbers we were able see the business’s ebbs and flows, the assumptions she had made, and the unwritten rules that had guided her business decisions.
After getting a clear picture of exactly where the business currently stood financially, it was easy to see the gap between where she was and where she wanted to go. The next step was to create a clear plan, with specific milestones, that would help her get her business where she wanted it to go.
Knowing exactly what you’ve got – money, people, time – is critical to developing any aspect of your enterprise. Whether you want to grow your business, develop staff or make changes in your operations, you’ve got to make sure you begin with a clear idea of where you are.
Think about what is working, what’s not working and what you would like to be different. Ask your key players how they see things. You might even want to call in an expert for an objective assessment.
When things aren’t going well, it’s natural to want to jump in and shake things up. Resist that urge! Taking time to assess where you are will get where you want to go faster. Confronting the facts is a skill that all successful managers and business owners possess. And this is the perfect time to start.
A year after we first met, the woman who was paying herself “whenever she could” now has a reliable income from her business. “I can’t believe I struggled all those years,” she recently told me. “I could have been doing so much better if I had only recognized what I was doing!”
Remember: Information gives us power. The clarity you will gain will give you more information, and more confidence to create a business and life you love.
Have an extraordinary day!