Financial strategy for business survival
This guest post is written by Nick Petra of Strategic Duck Business Consulting: It’s easy for a business owner to get “lulled” into a belief that by increasing their marketing efforts more business would come their way and all problems will be solved. That type of thinking results in spending most of the business hours marketing and very little to the rest of the vital business components. With this type of mentality most business owners start their business and remain a small business in size, income and vision. I have experienced so many occasions where the check book was the financial record keeping system. Few business owners really understand the concept of money and how it applies to the business.
A business plan is an essential tool for a growing business. One of my first orders of business with a new client is to develop and implement a strategic focus business plan. Once that is completed, a strategic financial plan is developed to put realistic numbers as to what is needed to reach company objectives.
The financial plan covers the same action categories as the business plan, i.e. systems, cost of products/services, marketing and operational costs. Projected budgets, income and expense worksheets provide a method of measuring progress and the needed accountability. Overseeing the financial health position is something that every owner must tend to at least on a weekly basis.
I find that money and the realities of its role in growing a business is a much avoided topic. It conjures feelings of fear instead of the realization of the benefits it brings. A “money” accountability system does not have to be difficult to establish and maintain. Once set-up and implemented it will grow as the business grows. The “hand” system will be replaced by new software and eventually an accounting person will take over the work. The most important thing to remember is that as the business grows, the owner must always assume weekly responsibility for knowing and understanding the exact financial position of the firm.
As a Certified Financial Planner I have experienced the difficulties when a financial strategy is not established in a company early in its existence. The longer it is put off the less the survival chances for the business.
Small disciplines repeated with consistency every day lead to great achievements gained slowly over time. - John C. Maxwell