Business owners have many things to worry about: earning enough revenue to cover their expenses, providing value to their customers and the people that they serve, and managing the day What Keeps Business Owners Up at Night? Not Having a Strategic Planto day operations of their business. They shouldn’t have to worry about searching for ways to eliminate the red flags in their business, though many do. In our last blog, we discussed various red flags that keep business owners up at night. In this blog, we’ll explain how to eliminate these red flags.
How to Eliminate Red Flags
If red flags have been popping up everywhere throughout your business, the good news is that they can be eliminated, with the help of some time, intention, and guidance.
So how exactly can one solve this problem of red flags? Two things: Power CFO and a strategic financial plan.
What is a Strategic Financial Plan?
Put simply, a strategic financial plan is a fleshed out plan for your business that includes your financial goals for the business and how to achieve them. Each of the following aspects serve an important role in your success:
An outline of the culture of your business
Key Performance Indicators (KPIs) identified and explained
A team focus
How technology is utilized for your business
Culture of Your Business
The culture of your business should be set up so that it can be communicated to both employees and the company. Questions to ask yourself to define your culture include: What is the focus of your business/where does it currently lie? How is success defined? What does success look like? At the end of the day, you want to present your business as a unique, individual company.. Spending time on this step will be helpful in developing the other parts of this plan.
The important thing to remember about KPIs is that they are not actionable. Instead, they act in a way that helps you examine data and make sense of that data. KPIs aren’t goals that you set to follow, they are tools that can help show you trends and opportunities for your business and the market. They should go hand in hand with the rest of your strategic financial plan. If they don’t, then there’s no point in having a plan to begin with.
Scorecarding is extremely important in this plan, because it provides business owners a snapshot of how their business is performing according to the goals that they set. It should be reviewed regularly (at least monthly, but weekly is even better) for the most up-to-date measurement of performance. Numbers don’t lie. How do you know where your business is at if you don’t check?
Though business owners are the face of their business, it’s crucial to understand that they don’t have to deal with problems or address red flags alone. When this plan is adapted to a team and each role is clearly outlined, the team can help lighten the load for the business owner by all team members working together towards success.
One of the most expensive investments for business owners is technology, so it shouldn’t be taken lightly for this part of the plan. How does your business utilize technology? Are you using it to be efficient, or is it an added stressor? Some may add technology to the business simply for the sake of doing so, so that they can be defined as a forward thinking business. However, this “everyone else is doing it, so I will too” mindset is often expensive, and ultimately results in a complete mess.
Considering how technology can be used to optimize your business process and improve efficiency is a necessary step in laying out this part of the plan. If you can’t decide on a good way for the technology to be used or implemented, it may be a sign to pitch it.
Why is a Strategic Financial Plan So Important?
Business owners that have no strategic financial plan are unaware of the health of their company. Isn’t that pretty concerning? If you take medications and eventually need a refill, doctors will require a check-up to ensure the medication is necessary for continued health. Are you doing that for your business? If not, now is the time to start.
Every company should have a strategic financial plan, especially because it defines expectations for the business, so you know what will make or break it. Additionally, it helps business owners to know exactly what they need to focus on to improve.
All companies have red flags, but too often, they’re looking at the symptoms of the problems rather than the problems themselves. A strategic financial plan provides the information, tools, and plan of action necessary to tackle these red flags head-on. Additionally, this plan provides structure for your business, which allows you to have the ability to make proactive changes instead of reactive changes.
How Power CFO Can Help
If the above information seems a bit out of your realm to put into action, fear not - Power CFO can help. Whether you need assistance establishing a financial plan from the ground up or you want some help with weekly or monthly KPI checks and scorecarding, we’ve got your back.
If your business needs and personal needs are not in harmony, we can help with that as well. Using our strategic network of best-in-class partners, we can assist in any area of your business to eliminate red flags so you do not miss out on significant opportunities.
We know what it’s like to have a passion and a desire to share that passion with the world to help others thrive, which is why we do what we do. Your dreams are big, and they certainly don’t have to be attained alone - let us help you.