Have You Checked Your Business Report Cards?

25 May 2018

We can talk about systems and marketing and all those exciting things to achieve double-digit growth. But in this video I explain that the health of two documents in your business – your “report cards” – are the most important things.

If you would like to hear more about this please feel free to get in touch below.

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When you really take the time to fully understand every line of your balance sheet and your profit and loss statement, that is when you start to really take control of your business.

You don’t need to become a chartered accountant, you just need to know the right questions to ask your bookkeeper and be on top of exactly who in your organisation is accountable for every pound going in and out.

Then your business can truly become an asset rather than just another job for yourself.

What I want to talk about today is your report card. Now over the last 10 years or so working with hundreds of businesses across different sectors, helping them achieve significant growth for themselves. I constantly remind my team and our clients that, yes, we can do all exciting things. We can talk about systems, we can talk about marketing, we can talk about sales. All the things you can think of in the business, but at the end of the day what really matters is the report card and how healthy the report card is looking.

What is your business report card?

Now what I mean by that is the report card that you have at the end of the month, at the end of the quarter, at the end of the year is your profit and loss statement and your balance sheet. And what really matters is that how healthy those two statements are looking because all the activities, all the strategies that are being looked at and talked about and acted on should culminate into producing the desirable healthy the report card.

One of the simple things that I want to talk about today is actually what is it that you can do and leverage your other team players to make sure that we all are moving in the same direction to achieve that end result. Now, most of the business owners they focus on the sales, they focus on maybe the GM net profit and yes the cash in the bank, as far as the balance sheet is concerned, though there is so much more detail that needs to be looked at. But just keeping things at a very very basic level and these are the key things which people look at. But the point is that there are so many variables that come into the picture to determine that there is the right level of net profit, there is the right level of the cash in the bank and of course the overall value of the business.

Who is responsible for each line?

Now what you need to do is that if you look at your profit loss statement and balance sheet you will see different items sitting there. And the question that you’ve to ask is “Who is accountable for this line item in my profit and loss statement?” What I mean by that is, for example, who’s accountable to make sure that your cost of goods or services is in control? Who’s the person who should be accountable for making sure we’re not spending too much on stationery or on vehicles or on parking costs.

There are so many line items and you need to have clear accountability for each line item because what I have seen many times is that by the time that your line finishes, there are leaks happening at different levels which look so small but when they come together it can have a significant impact on the hard work and on the report card.

Do it – draw out your business report card!

I would really like you to draw out your report cards, have a look at each line that’s sitting there, and ask yourself a question. Do I need to make someone accountable? Or the person who’s accountable, is he or she doing the right job that you are happy with, which will ensure that, yes, we are making the most of the things that we’re doing in our business, the efforts they’ve been putting in to have a successful business.

And look, one more thing, if you want someone from outside to look at things in a very objective way then maybe you should think about consulting. If you want someone to give you the strategies to actually make sure there are no leaks, strong consistent growth, with good profits and good cash flow, and so you can do the things that you absolutely love to do in your personal life, then please feel free to reach out. We will be very happy and privileged to serve you.

If you would like to hear more about this please feel free to get in touch below.

Get in touch

We are looking to invest in good businesses.

If you would like to have an obligation free discussion about selling your business, please email shweta@growthidea.co.uk. You can find more about our investment criterion on https://growthidea.co.uk/private-equity.

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