When you are running a business, it’s common to get caught up in the day-to-day ins and outs, and maybe even swept away by the creative vision that led you to become an entrepreneur or organizational leader in the first place. But the harsh reality is this: most leaders aren’t truly running their businesses like businesses. Are you?
Here are some behaviors that indicate you need strategic guidance from a finance and operations standpoint:
Behavior #1: You only take a thorough look at your financial performance when tax-time rolls around.
When you are preparing for your annual tax filings, you are looking at a year’s worth of financials. The catch is that by the time you get around to analyzing these numbers, it is already too late; the best you can get is a report about how you did last year.
Rather than holding your breath year after year hoping you were profitable, great leaders know their numbers. They make a consistent effort to improve the company’s financial situation throughout the year, taking control of their financial outcomes rather than letting the numbers control them.
While allotting time in between tax seasons to look closely at your business finances will yield a better outcome, it’s never too late to get started – even when tax season is right around the corner, or a recent memory.
The key when it comes to your company’s numbers is to change not only your behavior, but your mindset. Take a look at your past financials through a different lens – a future-focused lens. Utilize your numbers, even the unchangeable ones, as a guide for what to do (and not do) moving forward.
Behavior #2: You work primarily on the day-to-day operations of your business.
Many leaders don’t take the time to think strategically about how they can make their business more successful. Rather, they find themselves caught up in the day-to-day operations of their business, putting out fires and handling smaller tactical tasks.
If you want your business to reach its full potential, it’s important that you step back from the day-to-day tasks and start focusing on the bigger picture. This starts with setting strong goals for your business, and establishing measurable roadmarks along the way so you can track your progress.
Behavior #3: You are reactionary rather than responsive with your finances.
When COVID-19 hit, there were two types of businesses: those that reacted, and those that responded. In many cases, this distinction separated the businesses that stayed afloat and those that went under.
Reactionary companies are ones that can possibly survive the present moment, depending on what is going on externally. In the short-term, they may do well, and possibly even catch some lucky breaks. However, reactionary companies lack plans for reliable profitability. This means that when the market is more volatile, or circumstances change, they frantically try to make ends meet, without time to even consider strategic alignment.
On the other hand, responsive businesses have a deep understanding of their business performance and strategic positioning long before an unforeseen circumstance arises. They have clearly-set goals for their profitability, and due to their level of clarity, can easily tweak their roadmaps and adjust their sails as needed.
If your business is currently a reactionary one, change begins with knowing where you stand today. Once you have a true understanding of your business performance, you can begin to pursue improvements that will strengthen the infrastructure of your company.
Behavior #4: You don’t consistently seek out opportunities to improve your business from a financial perspective.
When it comes to your company’s financial situation, do you ever find yourself thinking “that’s just the way it is”? If so, chances are you’ve dropped the ball when it comes to seeking opportunities for financial improvement.
In reality, there are likely endless opportunities out there for you to create efficiencies, cut costs, and/or take advantage of new revenue opportunities. If you aren’t sure about what these avenues might look like, or what steps to take, that may indicate that it’s time for a profitability partner.
Behavior #5: You don’t have a long-term strategic financial roadmap for your company.
If you aren’t aware of where you stand today, chances are you don’t have a comprehensive map of where you want to be tomorrow, and how to get there with efficiency and accuracy.
By crafting a Profitability Roadmap®, you can ensure that all of your business activities are relevant to your large-scale aims and objectives, and achieve success even faster than you may have thought possible.
At Blueprint CFO, we’re experts at creating roadmaps to help businesses achieve their growth goals. If you’re ready to start your journey to a more profitable business, reach out today!
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