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  • Christie Varner

PJS #019: 💥 Roadmap to Success: Step 2 - Determine where your Business is NOW

Where are you?

Clearly, you know the answer to that. But do you know it in relation to where you want to go?

When you set your GPS to guide you to your dream destination, or even to the grocery store, you first have to know 2 things:


1. Where you want to end up (your custom vision of success)

2. Where you are now

Welcome to part 2 of the Roadmap to Success.

Last week we defined your custom vision of Successful Me in 3 simple steps.

This week…we are talking about figuring out our starting point.

Determining where your business stands financially is crucial for ensuring its success and sustainability.

But how can I determine where my business is now?


3 Keys to Determine Where your Business is NOW

No way to sugarcoat it, so this is FC (feisty Christie!) here to tell ya that you have to figure out where you are financially and operationally BY THE NUMBERS.

There is no drama in data. You don’t have to decide if you like it or not - you simply need to know it.

What numbers am I even talking about? Let's dive in...

1. Financial Statements

  • Balance sheet (shows your assets, liabilities, and equity)

  • Income statement (revenues and expenses)

  • Cash flow statement (inflow and outflow of cash in your business)

Likely you are receiving these from your bookkeeper/accountant every month...but now pull them out & actually review the numbers and think through what they are telling you. And what questions come up by looking at them.


Financial reports provide a snapshot of your business's financial health & help you understand your financial strengths and weaknesses.

2. Key Performance Indicators (KPIs)

The core 4 financial KPIs I always encourage businesses to track are:

  • Cash

  • Revenue

  • Gross Profit margin

  • Operating Profit margin

Every industry has some additional important numbers to track. But don’t get bogged down.

Every industry has some additional important numbers to track. But don’t get bogged down.

Review these 4 Core KPIs to get a sense of where you are now. You'll gain a better understanding of your business's financial stability, efficiency, and profitability.

3. Spot the Trends

No, I’m not talking about fashion trends, my friend. 😉

I know we just looked at your most recent set of financial statements, but now we need to review them over a period of time. Let's compare them monthly or quarterly over the last year or two.

❓ What am I looking for?

✅ Trends & patterns!

  • Is revenue increasing or decreasing?

  • How are expenses tracking relative to your revenues?

  • Do you see trends by quarter in the past that you can expect to repeat in the future? What plans should you make now because of that?

By reviewing your financial performance over time, you can make more informed decisions about how to allocate resources and set a plan to achieve your future vision of success.


- - - - -

What if I Don't Know How to Do This??!

If you're feeling overwhelmed because you don’t know how to do this, don’t panic & don’t beat yourself up.

SERIOUS QUESTION:

❓Until you’ve been taught how to read financial statements & trends, how would you know how to read them & what they mean?

✅. Right. You wouldn’t.


Feeling relieved? Hope so. You can't know how until you've been taught. Period. End of story. Stop beating yourself up. Counterproductive.

If your business is growing, but your goal is increased profit and to take charge of your cash flow…you probably need some help.


OPTIONS:

💥 DIY

You can learn absolutely everything on the internet. And a lot of it you can learn for free.

I'm guessing that doesn’t appeal to you though. Who’s got time to become an expert in one more thing?! Am I right?

💥 Fractional CFO

Your business's shortcut to your success. Areas CFOs help with include:

  • financial statement review & analysis

  • strategic business planning

  • budgeting and forecasting

  • cash flow management

  • goal setting & accountability

A fractional CFO provides financial leadership & guidance on a part-time (fractional) basis, helping you make informed decisions and optimize your resources.

Contact me to learn more about how I can help your business succeed and for us to see if we're a good fit to work together. I have availability for 2 new clients this quarter.



TL;DR:

1. If you don't create a vision of success, you won't achieve it.

2. If you don't know where you are, you won't get where you want to go.

3. Know your numbers - no drama in data

4. 3 key areas to review - financial statements, KPIs, trends

5. Don't feel bad if you don't know this - you can 't know without having been taught it

6. DIY to learn it or hire a fractional CFO (let's talk!)


- - - - -

Okay, so Part 2 of the Roadmap to Success was actually pretty straightforward. But it may take you a bit of time to gather the information and do the analysis.

Next week, in Part 3, we'll dive into the action steps your business needs to take to get from where you are now to your custom vision of Successful Me.

And that, my friend, is where the fun really begins. You in? Let’s goooooo!

Please let me know how you’re feeling. My goal is to write this to you to spur you on to make great decisions that will benefit you, your team, your business & your life.

If you have questions, I'm here to help. Even if you’re not quite ready for a fractional CFO yet, just ask me anway. I love to help anytime I can.

See ya next week, my friend!

Whenever you're ready, here are 3 ways I can help you:

1. Interested in a 2023 planning session or cash flow forecast system? Schedule here.

2. Want to chat about how you can gain peace of mind & confidence with a fractional CFO by your side & on your team? Schedule a call to see if we'd be a good fit to work together.


3. I post on LinkedIn every weekday at around 7:15a CST. I'm responding to questions in my DMs from 7- 8. I'd love to connect. Find me here,


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What did you think of this week’s newsletter?

My goal is to create the very best simple small business finance newsletter ever. And I can’t do it without your feedback to help me improve! Please click on a link to vote:


🙌🏼 That helped me. (Yippppeee! My goal is to serve you value every time. YOU are who I’m thinking of when I write!)


😐 Meh - was ok.


🙀 Not interesting to me. (It’s ok if this is your vote for the week. How will I get better if you don’t tell me when I miss?!)




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