Business owners tend to have big plans for the future.
But often they get stuck, sometimes repeating the same year without getting any traction on their big plans. Getting frustrated and wondering when things are going to break through and they can crack on with what they know they’re capable of.
And there can be many reasons for this; leadership challenges, keeping focus, the wrong people and of course finances.
Financial issues are the most common reason I find holding business owners back from their big ambitions. If the financial core isn’t strong enough to build the ambition on, plans keep stalling, falling over – and I know how frustrating and painful that can be.
You’ll never grow successfully without a strong financial core
The thing is, if your financial basics aren’t already robust, growing won’t make them better. Growth will just magnify the weaknesses and give you more of what isn’t working. And it gets harder to go back and rebuild foundations the more you grow, so things break faster and break bigger
A few examples of the sort of thing I mean, from businesses I’ve worked with recently:
- Growing sales without knowing if the current jobs and customers were profitable – just increased the number and scale of loss making jobs
- Expanding the business before the cash flow basics were in place, ie proper forecasting, taxes put away and 3 months buffer cash set aside. Trying to grow without enough cash, or control of cash is a suicide mission!
- Growth based on gut instinct instead of a proper financial plan. You need to quantify financially what your plans mean, how much cash is needed, and then be able to see if your plans are working.
- Not having financial management information to give them the 360 visibility of how their business is performing.
- Not having the time or focus to decide the few most important things to work on, so everyone’s attention is scattered and distraction rules the day.
It’s like we think that growing our business will bring the answers to what isn’t working now.
But it won’t.
We have to fix and secure each level as we grow. Learn the lessons. Make the business stronger.
Growing too quickly to put the proper financial controls, processes and information in place, as boring as this sounds, will put your business as risk every day.
It can feel like stopping to secure the basics is going to slow us down, get it the way and hold us back. Stop us taking opportunities.
But it isn’t.
I’ve seen enough over the last 20 years to be certain that trying to grow with a weak financial core is painful, slow and ultimately not possible. It’s far better to know where the weak points are, shore them up and know this will finally let you go for it.
Knowing your finances won’t keep tripping you up.
When you know your processes are strong, that you’ve got great financial controls that will keep the business safe and in profit, when you’ve get awesome financial information every month that tells you everything that’s going and gives you confidence in the year ahead… well nothing can stand in your way!
A client last week summed it up best last week when he said after our quarterly retreat day “I’m really excited – there’s some necessary foundation work to do, following which we should be able to smash through the barriers that are currently preventing significant growth”