Startups that want to grow up into successful businesses need to focus on what they can control which is their performance as the numbers don’t lie. While it’s a prosaic discipline a lot of company owners prefer to leave to someone else understand the numbers and timing change is the key to progress and ultimate success.
Timing Is Everything
Work on your relationship with your bookkeeping and the financial data of the business. Make sure you know how to read profit and loss and financial statements and then time your action to implement change that has a positive impact on the business.
Investing in systems and staff or product development needs the right decisions made at the right time and the numbers or data in review needs to be accurate.
The first step is to make sure good information or data you’ve got is accurate. Bookkeeping data accuracy is essential to good decision making, and for many young businesses with owners wearing too many hats i.e. they’re the marketer, bookkeeper, salesperson, and with so many roles and only a finite number of hours in the day, the role that is least liked gets the least attention.
Startup owners are entrepreneurial and usually prefer selling to working with numbers this is where using business management systems and apps comes into good use and a good bookkeeper!
The second step to getting traction in your business is using the information now known as data to make important decisions about the business. How the data is analysed is interesting as most managers will use a two-pronged approach in their review of historical performance. There’s the daily reviews and also project-specific reviews.
Project-specific & Daily Review
Project-specific reviews are looking at one part or one time period of the business operations a snapshot so to speak of performance over a six month period or 12 weeks and make decisions based on the outcomes identified. This can be about change in the business that could see a change in pricing, or staff hire or investment in new technology.
Although this is important for tweaking the system so to speak, we focus on the daily review when we want granular knowledge of performance, for example looking at the profit and loss and balance sheet every day. Then comparing the statements and reports to previous months and years.
Those numbers represent human behavior. Sounds silly, but that is exactly what your profit and loss is, the culmination of the activities of you and your employees. If we can dissect the numbers, we will know how to change human behavior. This is how we bring success to businesses that are struggling.
This bears repeating since many businesses never achieve their potential because they don’t use the numbers to drive more success in their business.
The formula is so simple, yet very few businesses ever figure it out. The bottom line is that you have control over making your business more successful when you have financial clarity.