Remember What Your Business Is

Do you ever get so caught up in details that you essentially fail to remember what your business is? Of course this question is a little tongue-in-cheek as I doubt anyone truly forgets what they are selling. Rather this has to do with how we all can get so distracted by the nitty-gritty details of running a business that we lose sight of the big picture and forget we are in business to meet the needs or desires of customers and as a result generate a profit and positive cash flow. I’ll ignore the age-old question of what are you really selling, like a company selling clothing is not really in the clothing business but rather the business of making people feel good about how they look. That, as important as it is, is another issue. No, I’m really focusing on distractions and details that keep us from focusing on what truly matters.

Time and Resources

No matter what your company provides in goods and services, there are always the back-of-the-house details that can easily distract us from the most important things. For example, imagine you are working in sales and you get totally immersed in meeting your sales goal of a certain percentage growth over the prior year. Well, that’s all fine and dandy as far as it goes, but it can also derail you from what may be more important. For example, what if you are trying to sell all your products or services with the same levels of effort or to all your customers and potential customers with the same diligence? But, now stop a minute and think about something. What if you merely use something as simple as the 80/20 principle to help you focus your efforts? Perhaps 10% to 30% of your products easily provide 70% to 80% of your sales. In addition, imagine that looking back a little lets you see that no amount of effort seems to make any meaningful change to this reality. Perhaps you find the same thing is true of customers. Maybe you have 100 customers and 25 of them makeup 80% of your sales, and hindsight shows that past effort has not changed this. Maybe you’re so distracted by your drive to grow you sales by a certain percentage across the board that you aren’t putting the majority of your efforts on the products and services and customers that are most likely to make this happen. Your business is to meet the needs and desires of customers through the products and services they desire, but not all customers, products, and services carry equal weight. If a customer is very fickle, doesn’t buy a lot, returns a lot of things, and always seems unhappy no matter what you do, perhaps your efforts should go elsewhere. But this is just in the sales area. When we get to what are thought of as support roles it gets worse.

A Case in Point

Accounting is a great example of how easy it is get swamped in the details and miss what really matters. Let’s say you a small business and accounting tends to be somewhat of a do-it-as-needed function in your company. If that is the case there is a high likelihood that things get pushed to the side over the course of a month, only to have to rush at the beginning of the next month to produce financial statements. Now, those may be absolutely beautifully prepared and highly accurate financial statements, but unless some time is taken to understand what lies behind the numbers and analyze a little then there is a good possibility that’s all they are; beautifully prepared and highly accurate. So you look a little like below with shuffling stuff around on a desk trying to produce financial statements but missing the important things.

cluttered desk

If you are always tight on cash wouldn’t you want to know why and what you can do to improve your position? What if you could identify the things that are using excessive cash. For some examples of this see 3 Low Cost Sources of Cash – Part 1 and 3 Low Cost Sources of Cash – Part 2. Keep in mind these are just a couple of things to consider. Although the business of your business is the same, if you doing the accounting you also have to remember what your business is, namely providing meaningful insight from financial reports.

Maybe Some Outside Help

If you find that you cannot find the time to analyze your financial information sufficiently to identify trends and shortcomings and their causes then perhaps outside help is needed to see the opportunities hidden in you financial information.

So if you find yourself scrambling to find the time to get your financial information done properly, consider a Part-time CFO or Controller. There is a good chance that the hours you will need them are not that many and the benefits you reap may well outweigh what you invest in them. And, yes, done properly this is an investment as it should produce a worthwhile return. Incidentally, I personally think integrity means that if I don’t think I can be of real benefit to you then I will tell you, although you may still want relief from the process. Incidentally, for a Part-time CFO or Controller the expression to remember what your business is simply means that in addition to taking care of some of the accounting for you they should also be focusing on helping your business grow and improve profitability and cash flow.

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.

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