The tax filing date is behind us and the first quarter of our business is history. The results are in.
How did you perform? Always a good question. Are you growing or dying?
I, like most of us, have been head down into the push to finish quarter one. I’ve been very consistent in my morning routine; 5AM wakeups, daily ‘SAVERS’, consistent workouts, daily 90 minute focus pushes, important versus urgent projects and task, etc. I’ve been trying to maximize my personal productivity and the productivity and results for the businesses I work with.
The companies I am working with are all doing well. We have challenges, but we’ve moved the ball forward down the field this year – accomplishing our plans and getting things done.
I just wrapped up some planning for one of my clients this week and thought the following outline may be helpful for you as well.
Hopefully, you have your March month-end close by now – I can’t stress that enough – have solid results.
Do a quick summary of the financial results comparing to your business plan that you prepared earlier in the year.
Compare sales by product line, gross profit by product line, # of invoices, average invoice value, top expense categories, net income, accounts receivable turnover, inventory turnover, cap ex, accounts payable turnover, debt coverage and leverage ratios, and other specific industry stats. Look at your project lists and get status reports on each.
Take a hard, objective look at your business plan assumptions comparing first-quarter actuals. Re-adjust your plan and assumptions as necessary.
Don’t fool yourself! I’ve done this several times before – believing off-the-cuff assumptions and not getting actual data. In one case, I assumed the average service call for this large HVAC company at $350, but after getting actual data the average was more like $225. Big difference with 6 branches and 50 trucks. We made some adjustments and doubled our quarterly net income!
If you’re doing better or worse than you anticipated – make the adjustments now.
Also, take a hard look at your organization chart. How’s the team’s morale? Are they getting their projects done? What’s next on their lists? How were your production statistics? How are your actual sales and collections? Is your marketing effective? How is your inventory accuracy and turnover? What top 5 first-quarter goals were accomplished and which were not?
After getting the facts, revise your plan. Your new business plan will contain actual first-quarter results with monthly projections for April through December. I like to revise business plans quarterly. This is a great tool to share with your team and push everyone to step up for the second quarter.
Sports analogies get old, but annual financial results are very much like a football game. The first quarter is now over and the second quarter has just begun. There’s still a ways to go for the end of the game.
That Q1 review meeting is essential as I discussed in my last post. Schedule it in April – get your results to your team while they are fresh. It’s essential that everyone understands the scoreboard (the financials), the clock, and the company’s vision, strategy and objectives to maximize the points on the board.
Huddle up, call the play, and get back out there.