Owners: Read Your Scoreboard
Updated: Jul 17, 2021
I am guilty. I have been letting my money take a back seat. I haven't been tracking like I should. I would never coach a client to this kind of poor stewardship. I have a time block every Friday called Finance Friday. I block two hours to manage my money, reconcile my accounts and audit myself. I have really let this slip during my move over the past few months and I write this blog, because as I scold myself, I know there are many of you out there who are guilty of the same thing.
Back in 2019, I went to Tony Robbins' Business Mastery and I met Keith Cunningham. Since then I have read several of his books, which I highly recommend. The Ultimate Blueprint for an Insanely Successful Business and The Road Less Stupid. What I learned from Mr. Cunningham changed my mindset about money. I have always considered myself frugal. I don't care about brands and fads. I like quality, so I will spend for it, but I like to think of myself as a good money manager. What I learned from Keith is how to read my financial statements. I have had bookkeepers and accountants in the past, but reading the financial statements every month is my responsibility. Watching my scoreboard and knowing what it means is essential to a successful business.
That hasn't always been true. And I still fail at it occasionally which is why I am confessing now! So much money can be lost by not paying attention. Auto-pays which go unnoticed, amazon instant purchases, always picking up the tab. Those are the little things that add up. But what about the big things, the un-budgeted expenses, the investments you want to plan for, the life you want to build.
Keith Cunningham said, "Business owners struggle financially because they are too busy "growing and operating" the business and not running the business-end of the business." This is a fools errand. Warren Buffet said, if you can't read the scoreboard, you don't know the score, and you can't tell the winners from the losers!" When you get comfortable knowing there is always money in the bank, but you don't plan and budget for the future, you can find it won't be there when you need it.
Are you always looking for leads to build your revenue or are you looking for ways the money you already have can work for you. Running a business is complex. These are the questions that I ask myself daily: What is your Vivid Vision? What are the skills & tools you need to have a sustainable business? Who do I need? And what is your exit plan?
Those are great questions. However, if you don't read the Scoreboard which your financial statements each month, and make informed decisions about your money, you may get seriously off-track. What gets measured gets done, managed, reported and improved exponentially!
It's the end of the month and 4 months into 2021. Where are you with your financials? Keith says "the language of business is accounting" but many business owners know nothing about that language. If that is you, it's time to learn. Don't leave it up to your bookkeeper. That is how embezzlement happens. Get involved and know the language. If you looked at your financial reports, would you know what needed to change?
My favorite analogy is when Keith says, "Business is a game. Like any game, there are winners and losers. There is fierce competition and a set of rules. There are bad moves, good moves, and better moves. Strategy is critical. Execution is paramount. And, of course, there are scoreboards. Name one competitive sport in which you play the game hoping to win, and you never glance at the scoreboard--and if you do, you don't have a clue as to what it says. Can you imagine a Super Bowl where the scoreboard stops functioning moments before kickoff, and the announcer says, "Don't worry about it...no one looks at it anyway?"And yet, that's how most people play the game of business."
I challenge myself and I challenge you to read your financial statements this month. Learn the language of business and keep your eye on the scoreboard.