When was the last time you went on a long road trip across the country? Think about the driver of the vehicle during that road trip, whether it was you or another individual. What percentage of time did the driver spend looking at the rearview mirror and glancing at the road behind them? What percentage of time was spent looking through the front windshield at the road and landscape ahead?
When looking at business finances, we analyze past behavior by looking at the rearview mirror. This is represented usually by understanding three major financial statements: the profit and loss statement, the balance sheet, and the statement of cash flows. How familiar are you and the leaders in your company with those statements? How often do you review them and what impact do they make when making major decisions within the company?
Do you have trained people in your company that are handling this area of the business? Or, do you choose to outsource any of your bookkeeping or payroll? We really ask the difficult and significant questions in this area of the business and challenge the leadership team to make common sense decisions by incorporating this financial information.
In regards to looking out the windshield at what’s coming ahead, do you develop an annual budget? Do you consistently look at and follow the budget? We often take a unique approach, especially when working with the business owner, to initially discuss their personal financial plan as a part of the process for business finances. The skillsets overlap and it’s important to understand the starting point and basic philosophies of finance, especially regarding personal and business debt. We have a process and also a solid outsourced team of professionals that we may consult with in this specialized area.
Most importantly, we come up with a plan to measure success. Then we integrate the other key areas of the business to work harmoniously with the financial section.
If you are seeking results in the area of finances and want to learn more about our process, please reach out to EntreResults@gmail.com or call 281-808-0594.