Can you believe the first month of the year ended last week? It is me or is this year is moving at warp speed? We only have 90% of the year left to complete the personal and business goals and objectives we set for the year.
It’s important for companies not to get too detailed or be too vague. Companies need to focus on their vital few objectives, a term from a process called Six Disciplines for Excellence developed by Gary Harpst. The VFO’s are the few big picture goals for the year that will really make a difference. Properly set and communicated, VFO’s allow everyone in the organization to focus on the correct targets and each department’s goals to dovetail into the company’s vital few objectives so that everyone is on the same page.
That said, how are you doing so far this year? Get a read on your financial and non-financial goals for the first month of the year now. How are your sales, gross margin per customer segment, new customers/patients, number of patients per day, average revenue per invoice, inventory turnover, etc.? Make any needed adjustments early to stay on track. Again, I will emphasis the importance of a quick close to get your financial numbers early and the 80/20 principal to focus on the areas that will make a difference. Communicate the good and the bad to your team to hit your first quarter’s targets.
Now is also the time to evaluate and recast your 13 Week Cash Flow based on January’s sales and your current overhead. If you don’t recast your cash flow forecast weekly (as I strongly suggest), take the time now and recast inflows and outflows by week to ensure you understand your cash sources and uses. We “finance guys” typically focus on the rear view mirror, constantly closing the prior month’s financial statements and getting through the year end audit. The car analogy is perfect. The real value-add for the core business though is helping business leaders look forward out the windshield and provide dashboard-like stats as to how the business is running and where the business is going. The 13 Week Cash Flow and the business dashboard help us look forward.
With your VFO’s and cash flow in review, also evaluate your team. Your team will be what makes your company successful. Disruptions in your team can kill momentum. Ensure you have the right people in the right seats on the bus. It is a constant process, but make sure you’ve done the best you can to pick the right players for your team. Both elements work together for success.