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Every business has a story to tell and it can be found in the numbers. We've all heard the saying, "Whatever you focus on is what you will get!"  In all great sayings there is always another side to the story.  Just because we focus on something does not always insure we'll get it.  Many people have read books, gone to workshops, or attended seminars about how to set financial goals and get their business financially healthy but often that's just no enough to make a real difference. In this issue we'll try to make up the difference so you can truly understand the financial story your business is telling.

Take your focus to a deeper level  A person’s desire for focus is simply not enough to make it a reality.  A golfer can have intense focus and desire on putting the ball into the hole and still miss unless he takes his focus to a strategic level.  If he were to slow down enough to look at where he is now (accurately & completely) forgetting about the last drive and ignoring the next par 3, checking his stance, grip and alignment and then determine the true trajectory in lining up the entire path of the ball - in other words all the points the ball needs to pass through on its way to the cup, then he would have his correct strategic sequence.  At this point he would have increased significantly his potential for sinking the putt. Most amateur golfers and frustrated business owners know to do this sort of thing: the one for golf, the other for business - the problem is not a lack of knowledge, it's the absence of an easy to use system that produces consistent results. No system, no consistent results!

Here is a simple formula (part our system) to explain how this works called the Financial Focus Equation.

  Honest Focus on the Outcomes    =  Proper Strategic Trajectory

      Key Financial Indicators

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Whether or not you play golf, successful owners and golfers understand the need for proper trajectory.  Here's a question for you.  Is your business on the right  financial trajectory for 2006?  Maybe yes, maybe no. Can you back up your answer with hard facts, with key indicators, or just an educated guess? 

For business owners, having a solid financial focus should allow them to line up each point along the path to success. Keeping track of money should not be just about tax compliance. In the main it should be about strategy - and in particular the right strategic sequence. So if you want to improve your financial focus it may be time for you to do some “spring” cleaning in your financial systems and get more strategic. Here's how:

Don't Wait  More important than what you have done is what you are willing to do today to move ahead...right now.  I want you to role up your sleeves and to be willing to change the way you view your company's money.  It is time for us to take a bird’s eye view of your company and to recalibrate what we see.

What are you in business to do?  Why does your company exist?  The answer is what makes up the foundation of your Strategic Vision.  Without a clear, documented Strategic Vision any company will inevitably wander off course and find itself on the financial rocks.  You may say, "Not Me!" But like many corporations we've all read about in the papers, the health of an organization is not maintained by wishful thinking or educated guesses -  it's maintained by healthy, accurate numbers presented monthly in a strategic manner.
 
Action Steps  To keep your boat on course, what kind of financial questions are you asking on a monthly basis?  It is important to look at the key financial vital signs or indicators of your company on a consistent basis - not just at tax time. 

Knowing how and why money moves into and through your organization can give you a tremendous advantage over your competitors. Money is like radio-active die that courses through the veins of your business. If you can track it and see how it flows or get's squeezed or diverted, you can make the right decisions that lead to a healthy organization clearing up blockages and maximizing efficiency. If not...well, you can guess where that leads.

Here's what most business owners miss: Money actually reveals how people think! Even more important for leaders, it can actually tell you what’s in people's hearts, what's motivating them! In a recent book it was put this way: "Economics is, at root, the study of incentives: how people get what they want..."¹ From customers to employees, if you could accurately know their true motivations, you would be able to foster the greatest loyalty and provide the highest value - and that's what good business is about.

“Where your treasure is, that’s where your heart will be also.” Matt 6:21

So if we are truly interested in a transformed business that accomplishes our Strategic Vision, we have to gain leverage by getting our Financial Focus calibrated and operational.

From the Total Integration Program: Financial Radar! Below are 20 key questions every business owner should be able to answer on a monthly basis regarding the financial condition of your organization:

1. What is the percent change in sales for this month as compared to the same month in each of the last 5 years?

2. Do you need more capital or can you manage existing cash flow more effectively?

3. How do you define your need? Do you need money to expand or as a cushion against risk?

4. Are we meeting and maintaining our cash flow budget?

5. What is our total debt divided by our net worth?

6. What is our cost of goods sold divided by our inventory?

7. What are our net sales divided by receivables?

8. What does our balance sheet currently show?

9. What is our profit and loss previous year comparison for the current month?

10. What was the single greatest expenditure in the last 30 days? Why? Are we on track regarding ROI for it?

11. If cash follows clarity, what is the clearest thing in our business? Asked another way, where is all the money going to and coming from? Why?

12. Is anyone due for a bonus or promotion?

13. How much money have we given to charity or community causes? To whom and why?

14. Have we acquired any new debt and if so why? When do we estimate its payoff date?

15. Are we late on any payables? Why?

16. Are we current on our taxes?

17. How much money did we put into interest bearing savings accounts? What is our total savings?

18. How much money did we spend on personal development for our staff? Why?

19. Did this month take you closer to a financially healthy retirement? If so why? If not, why not?

20. How much of your current expenses go to outsourcing?

The answers to these questions are absolutely key in understanding how people are making decisions and what the results of those decisions are. This isn't just about paying the IRS. You certainly need to pay your taxes, but if that's all you see money as (profit/loss and taxes) then you are effectively running your business with your eyes closed!

Financial Focus is about a fundamental recognition that seeing money strategically is one of the business owner's most important tools in successfully navigating the rough waters of the marketplace.

These 20 questions, if asked and answered accurately each month, can give you the peace of mind and strategic focus needed to maximize your profitability, sustainability and growth...to see that putt curl into the cup time after time.

This could be the beginning of turning your organization into a well-tuned, systemized machine that is highly effective, profitable, and an enjoyable place at which to work!

These questions are based on a portion of one of the modules, Financial Radar, in the Total Integration Program for business owners. If you want to find out more about Total Integration please click here.

If we in business are going to live with real balance and long term success, then we have to start taking a strategic view of the manner in which we work.

Start creating a better business...today!

You Can Do It!

¹ -  Steven D. Levitt & Stephen J. Dubner. Freakonomics. Morrow, 2005. 20.

Next Play (June 2006): "Taking Profit Through the Roof!"

by Dennis Peacocke

It's Your Business...Take Control Now! www.TotalIntegrationNow.com

The Business Owner's Playbook is a monthly strategic resource that concisely equips today's business owner with instantly usable tools that produce lasting solutions for common challenges. Based on the principles in the Total Integration Program, this tool is provided for the betterment of you, your people, and your customers.

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