Blog What is Bookkeeping? Bookkeeping is the recording of daily transactions that cyclically follow a defined process. Bookkeeping breaks down into parts such as Accounts
Financial Review: Are We There Yet?
Are we there yet?
I read a post recently on my friend Jean Summit-Riker’s blog titled “Lighten Your Journey with Laughter,” where she has this great image of Mother and Baby turtle. The baby turtle is saying to its mother, “Are we there yet? Are we there yet?” The statement “Are we there yet?” reminded me of so many business owners I’ve known over the years, particularly when on the eve of a large project. But I’ve found that doing a financial review throughout the project can help put your mind at ease.
The client signs the most significant contract the company has had to date and then waiting for the first order. Picture, if you will, a small business owner, pacing; waiting impatiently; not knowing whether or not she’s entered the “Beyond Capacity Zone” (Queue Twilight Zone music).
Did the order come in yet?
She’s been pacing all this time, saying to her orders department, “did the order come in yet?”. Making the sales team crazy, “did the order comes in yet?”. All this time, she’s been pacing, asking herself and her team, “Are we there yet?”
She needs to fight the urge to focus on “Are we there yet?”. She needs to have the patience to focus on the next step. Which is “OK, we’re here, now what?” When planning a road trip with the kids in the back seat, you have your map, and you have your food, snacks, and toll money in the change cup. OK, so you have your EZ-Pass fastened tightly to the windshield!
You need to plan your business’ road trip with the same attention, especially if you are going to reply to a bid for a large customer that will put you into the place all Entrepreneurs and Small Business Owners want to go, to the “Beyond Capacity Zone” (again, queue music)
Crunch your numbers
Crunch your numbers, or as our moms told us, do your homework! Look at your costs, push your budgets and projections for quantities beyond conservative, hoping for orders. Most importantly, it is to do your homework before you reply to the bid! A financial review is crucial at this point. See how it looks. How many people will you need to hire to fulfill the contract, how much cash will you need to ramp up production and inventory levels to ship on time?.
Talk to your sales team and your CFO, test budget projections, ask yourself, did we miss anything? If you don’t have a CFO on staff, look to hire one on a project basis. Many CFO services companies will work with you on a part-time or project basis. The key is to plan for the road trip, and as Jean Summit-Riker says, remember to Lighten Your Journey With Laughter!
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