If you’ve spent any amount of time on this blog, you’ll here me talk repeatedly about what I call the 80/20 of business finance which comes down to three things”
So in 2009, how did you do?
As a business manager and owner, did you stay at a strategic level and manage the finance elements of the business through these three focus areas.
Has the business improved in each of these areas over the course of the last 12 months? What about what lies ahead in 2010?
The December year end is a time for celebration in many parts of the world and for many businesses, its also a time of year end planning, next year planning, and overall performance measurement.
Just remember that to have the financial success your seeking, the business finance side of the business needs to be managed and kept in balance with the marketing side.
And to me, there is no better place to start increasing your returns and future probability of success than through getting more focused on the three things mentioned above.
Finance doesn’t have to be hard, but it does have to be directed. Leaving all the business financing decisions up to the bean counters is just asking for trouble.
The key is to identify the metrics of the business that everything summarizes into so that you can quickly understand the overall health of the patient without knowing the inner workings of each moving part.
I had a Brazilian boss for a year and a half during my time working for a large multinational company. Whether it was because he was Brazilian or a type triple AAA personality, I’m not sure, but he thought he knew everything about everything. As a marketing person by nature, finance was something he needed to learn to do his job.
So every month, we would sit down and I would produce one piece of paper with all the key metrics of the business, all the things we needed to measure to make sure that the three core elements of finance I have mentioned were intact and functioning properly.
We would sit there and debate each item… why this was up and why this was down. His goal was to show me in less than an hour each month that he knew more about our financial position than I did, and my goal was to survive the interogation.
But the process did serve a purpose. At least once a month, even at a high level, he took the time to zero in on business finance and see if everything was in balance and if it wasn’t, to identify the actions required to get things to where they needed to be.
My boss wasn’t the finance expert, I was (of course I never told him that). And he didn’t have to be. He needed to manage the overall business and stay at a strategic level. And that’s exactly what he did.