subject: Sit, Stay, Grow: Are You Obedient To The Causes That Unleash Small Business Financial Results? [print this page] You cannot make your dog learn to sit and stay but you can tend to the causes that lead to a willingly obedient companion. In business and dog training the same fundamental principle applies. Focus on the causes that impact financial results. The key in business is to do what you can with the causes under your influence to promote the financial results you want.
My Australian Shepherd is one of the smartest dogs I know. I also understand that she is very food driven. So I tend to the cause of making sure I have enough dog treats with me when we are training. She responds quicker to new commands with regular treating. I also make sure she has enough rest, love and affection, exercise and water. All of these causes promote her learning and lead to the obedience I want.
Likewise in business there is a long list of causes the can influence your financial condition. I have learned to be accountable for the business causes that influence my company's financial durability. By focusing on these business causes I can positively move the financial needle for profitability, leverage and liquidity. The degree of movement varies depending on the relative impact of the business cause as well as forces outside of my control. I have seen a big impact on my financial condition from three primary business causes.
Put a leash on your business capital. Cash and credit are a company's life blood. Sales revenue drives profitability and provides cash for growth through strategically planned investments. Maintain a reasonable level of debt that can be comfortably serviced from operating cash flow. Go on a capital diet if necessary by repaying expensive loans or equity partners. Groom your lending relationships so you have a reliable source of debt funding when you most need it. Conduct a competitive loan bid process to get the best terms and pricing. Financial results including balance sheet strength can be improved by focusing on the causes that influence liquidity and leverage.
An old business dog can learn new tricks. Our parents wanted us to graduate from college as soon as possible and get real jobs. Professional student careers don't pay well but perpetual learning is fun. We should capture some of this enthusiasm for learning and professional development in our business career. Focus on the causes of executive education and advancing business ability to influence financial results. Learn basic finance and accounting skills to improve the cause of financial literacy. Have financial systems and staffing in place to handle your business demands. Assemble a competent finance and accounting team to promote the cause of reliable, consistent and accurate reporting, analysis and decision making.
Stay on your financial plan. One of the biggest factors that separate successful businesses from failures is the discipline to write an objective financial plan and follow it. By paying attention to the cause of making an informed plan for one, three, five years or longer you can improve the likelihood of achieving financial durability and reducing your business vulnerabilities. Focus on the factor of preparing and periodically reviewing your financial plan to make capital course corrections. Learn from your financial results but quickly return to tending to the causes of the results you want.
Don't get overwhelmed by trying to put these three puppies into your business basket right away. Start with one global cause and direct your focus there to start to improve your financial condition. Maybe organized financial records is a global cause that would lead to better business decisions and the desired results of more profitability, liquidity and healthy leverage.
Leash your business capital, always learn new financial tricks and stay on your financial plan. Focus on these causes which influence business profitability, leverage and liquidity results. The outcome will be influenced by your attention to the driving causes as well as other factors beyond your control. But you will know that you have done what you can to positively influence the causes that move financial results.
