Welcome to Stage 10 in the 2019 Tour de Profit! You’re fast approaching the one-quarter mark in this year’s race. Hopefully, by now you have made some significant changes in your business that will position you to do well in the next critical stages of this year’s Tour de Profit.
Today we are entering the MASTERY region of the Tour. We will race in the Mastery region for several weeks. These are critical foundational weeks in the race – where you focus on the fundamentals that will be necessary for the more difficult stages ahead. FINANCIAL MASTERY is one of the skills, capabilities, and toolsets you must have in your business to be successful.
Here’s Your Profit Tip of the Day
There is a saying that “speed kills”. The faster you want to go in your business, the better set of financial indicators you must have. Going fast is good only if you have the financial awareness and can read the financial dashboard.
This week, your task is to be certain that you have the fundamental financial insights into your business to help you make great decisions. Review these critical financial reports:
● Your Monthly Budget
● Your Profit & Loss Statement (P&L),
● Your Balance Sheet
● Your Cash Flow Statement.
These four financial documents will tell the story of your business, where your opportunities for improvement are hiding and what the near term future outlook is from a financial perspective. It is critical that you are having these prepared on a timely basis and are reviewing them monthly.
Once you have your monthly financial reports available, you are in a position to track some Key Performance Indicators or KPI’s. These are important ratios and measures that you can lift from your financial statements and track on a regular basis. You want to know how your business is doing relative to the past months – perhaps even to the same month the prior years.
These KPI’s are best viewed on a Dashboard – a visible set of graphs that tell a story of the health and trends in your business. Being successful in Financial Mastery is a great deal about your mindset. You must have the mindset to demand that you have the financial data you need to run your business.
There is so much that can be gained from the financial data in your business once you have the necessary systems and processes in place. You can begin looking at the individual profit margins by product or service type, you can see labor rates and overhead percentages – and many more critical metrics. If you are flying without instruments it is just a matter of time before you crash.
During this stage of the race, take time to nail down your Financial Mastery. Expect and demand the regular reports, graphs, metrics, and indicators that will let you race even faster – without the fear of not knowing where you are headed or whether you have enough gas! You must win this stage to position yourself for success in the stages that follow.
To get more tips on how to improve your leadership skills, your team engagement and your business results, go to my website, www.tourdeprofit.com and you’ll find lots of free stuff there.
And when you’re ready, join my FREE, private Facebook Group called The Peloton. It’s where business owners like you are learning, sharing and working together to get better every day! Here’s the link: https://www.facebook.com/groups/jointhepeloton/
Come on – join us! And remember, whatever you do, RIDE HARD!