Three Proven Strategies to drive your Bottom-Line:
By Ed Musmon (i need a CFO)
During my career, I have worked across a variety of businesses; both large and small. Each business differed in Size, Structure, Industry and Product/Service. Despite these differences, I have seen many common success Lessons (Strategies). I have repeatedly seen the benefit of incorporating Strategies and observed the missed opportunities that can arise by ignoring them.
Here are three (3) key Strategies to explore and consider when managing your business.
- Accurate Financial Information drives better Management Decisions
While we can’t always know what the future will bring, having accurate and timely information should be a baseline starting point. What type of information? I am talking about critical Financial and Operational information. The basics are the standard financial reports (Balance Sheet, Profit and Loss, and Cash Flow). After that, you move to identify your Key Metrics. Depending on your type of business it will include customer data, vendor data, inventory data, critical ratios, etc.
My recommendation presupposes you do Planning and Analysis when deciding how you are going spend your resources, whether on talent, capital assets, intellectual property or other.
How can you do an effective analysis if you aren’t confident your information is good? Answer: You can’t.
- Identify what keeps your Customers coming back and build on it
You don’t have a business without Sales. The first step to success is Sales and Collections.
Why do your customers buy from you? Do you have the best mousetrap, the best bargain, a service no one else offers, something else? I have sometimes found that businesses don’t always know why their customers chose them. In turn, they spend energy and resources on things that don’t matter.
What is the impact of your employees on the customer relationships/sales? In some cases, there are key employees or teams delivering an intangible that makes your drives the product/service/sales chain.
If your employees or some segment of your team are critical ask yourself if you are protecting this resource and building on it.
- Consider the Financial impact of your Major Business Decisions
If you are in business, you are probably doing it to achieve your financial goals. All day long you will be making decisions about that have potential to grow your success or hurt your prospects.
What does this mean? Some common areas that come to mind are: Staffing decision (who, and how many do you employ? Capital Investments? (what will be the Return on the new piece of equipment or property). How much do you invest in Sales, Sales Support, Marketing? These are a few of the many areas.
I have found businesses that model the results, (what I call the Risks and Opportunities) end up with better results.
In the end, they are making a calculated decision, and they have a basis for measuring and improving their decision making over time. Now, they can think through contingencies that may arise and are then prepared to adjust, as necessary.
These are just three of the proven financial practices which can positively drive the Bottom-Line.
If you would like help in developing these or addressing other needs, I would love to speak with you.