Archive: Business & Technology

Last weekend our friends joined us for some fun on the lake.  Mom and Dad took off on the paddle boat, to be joined en route by a couple of the kids.  In turn, the small boat was overloaded. 

As I saw them struggling to do more than paddle in circles, I thought their ability to steer was impeded by the boat being too full.  Not until they finally gave up, and brought the boat back to shore did we discover that its rudder was missing.  Probably broken off as the boat scraped against the stones at shore during one of the recent storms.

During the week, I got to thinking about that metaphor of the boat turning in circles.  I thought of so many businesses we  have worked with over the past few years.  Without the sound direction of a strong leader, they flail about, never successfully moving forward.  Instead, repeating negative patterns contributing to poor performance, year in and year out.

How do we see that so clearly?  A look at a company’s past five year financials tells quite a story.  Lets us know the quality of senior management.  Not only don’t numbers lie, they reveal several layers of information.

Good financial statements, backed up by a tight reporting process, enable any advisor to quickly assess the company’s performance.  Better still, a company whose owner knows how to use those numbers to affect prudent decision-making and strategic planning, typically has significantly more value than a company whose owner waits to know whether he/she made a profit of loss once the accountant finishes year end tax preparations.

How sound is your business’s rudder?  Do you use your financial information to make sound business decisions?  How often do you look at your numbers?  Daily?  Weekly?  Monthly?  Quarterly?  How comfortable and confident are you in understanding the information your financials provide?

If the answer if very comfortable and confident, great!  If you are unsure, or even embarrassed to admit that the financial issues are not your strong suit, take your head out of the sand, and hire an expert to educate you. 

Without a strong handle on your financial processes, your business is moving along like a boat without a rudder.  More than likely, profit margins are less than optimal.  Accounts payables, and maybe even receivables, are in arrears.  Cash flow may be compromised.  How can one know, without a clear understanding of the whole picture? 

Now more than ever, it is essential to be able to steer your  business competently through waters that are becoming increasingly tumultuous with the winds of financial unrest and uncertainty.


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