In every business there are a “Vital Few” success factors that drive the business. These truly important things determine profit or loss, positive or negative cash flow, and even the success or failure of the business.
The “Vital Few” for every business are different–with one very important exception–today’s bank balance! You need current information on the “Vital Few” factors that can, and do make a very big difference in the success of your business.
Generating the information daily is the most effective; weekly is OK but not nearly as good as daily. As for your “Vital Few” success factors, monthly is practically worthless.
Your monthly financial statements (ideally not later than the seventh working day of the month) should only confirm what you know!
Here are a few examples of “Vital Success Factors” that my clients have used in the past:
- Today’s bank balance (Always Number One!)
- Value of yesterday’s sales and value of yesterday’s returns.
- Accounts Receivable and total days outstanding as of yesterday
- Accounts Payable total as of yesterday
- Yesterday’s labor cost (including benefits)
- Number of first time customers
- Number of repeat customers
Every business owner should generate a daily “Spreadsheet of Vital Success Factors”. It’s the tool that lets you correct problems NOW. It’s the tool that prevents you from being blindsided by unexpected results when the monthly financial statements are published. It’s the tool that lets you know what is happening back home when you are on the road. Or, if you are a workaholic or on vacation, it will relieve many of your work related concerns.
Every one of my clients who used a daily “Spreadsheet of Vital Success Factors” wondered how they ever got along without it. The Spreadsheet relieved much of the stress so many entrepreneurs face on a daily basis. (They also told me that they were able to sleep better at night!) They were in control of their business. Best of all, when challenges arose (and they always do), they were able to take corrective action NOW!
The Coachella Valley SCORE Chapter has many qualified mentors that can help you set up a customized Spreadsheet of “Vital Success Factors” for your business. You will be very pleasantly surprised at the many benefits you will gain by spending a few minutes at the beginning of each day looking at your own status report for your business…your “Spreadsheet of Vita Success Factors”. Call today for an appointment with a SCORE mentor (760-773-6507). There is never any charge for SCORE mentoring.