Finances can mean the difference between a happy and functioning company and a miserable, struggling day-to-day battle for business owners.
How many football teams play a game without looking at how they are performing on the scoreboard? None. Straight away by looking at the scoreboard you see if you are winning or losing – scored more points than you have let in. Once you know this you can either work on your attack or defence at training, so you can make changes so you improve for the next game. This is logical right?
Applying the same logic to business, how often do you review your actual business performance on your scoreboard?
- Do you know which customers deliver you the most profit and which customers actually cost you profit?
- Do you know which type of work delivers you the most profit and which type of work actually costs you profit?
- Do you know what you need to change from one quarter to the next to improve your performance?
- Do you know which of your team members are scoring points for you and which team members are actually letting points be scored against you?
From our experience; through training, consulting and coaching to thousands of trade business owners; very few businesses take the time to stop and accurately check their score.
Harder NOT Smarter:
For trade business owners who do not look at their scoreboard to analyse performance, their world operates like this – Harder not Smarter:
- Each time the phone rings it is important and urgent – just like a Fire Chief MUST rush off and put out fires.
- Always busy, all the time – everything is completed in a rush last minute.
- Says yes to all work – Never says No.
- Never getting ahead financially – always struggle to pay bills at tax time.
- No time for holidays – Life has become work.
- No motivation, no passion, no future!
The above picture of a ‘tradies world’ is not what was envisioned when the business was started with great enthusiasm and optimism.
The Potential Future – Failure:
A result of living in this ‘tradies world’ directly contributes to the high rate of business failure:
- Over 80% of startup businesses shut down within 5 Years.
- Only 10% of the remaining 20% survive beyond 10 Years.
From asking the logical question – Why do so many businesses fail so quickly?
We found out through our research and studies why – It all comes back to the business owner not reviewing and interpreting their Scoreboard.
Research shows over 50% of businesses fail due to:
i. Lack of planning – poor direction due to minimal reflection on past wins & losses. Therefore no learning from past mistakes.
ii. Poor record-keeping – inaccurate and missing critical business information.
iii. Lack of financial awareness – not reported in a format to interpret or understand business performance.
How You Can Control Your Future – Smarter NOT Harder:
To ensure you do not become a statistic the first step is to choose either:
1. You Take Control of Your Business.
2. By Default You Let the Business Take Control of You.
If you choose Point 2, unfortunately no one will be able to help you. However, if you really want to take control and choose Point 1, you will begin making the hard decisions required to make positive change to your business, and more importantly, to change your thinking as the business leader.
Einstein said it best:
“Insanity – Doing the same thing over & over again, and expecting a different result”
Point is this – if you are not happy with your current business circumstance you must change what you are currently doing! Be prepared – with change comes pain to deliver ultimate gain.
If it is Good Enough for the Elite then it is Good Enough for YOU:
All elite businesses and sportspeople are open to receive advice, tips, coaching and mentoring to ensure they are continually learning to improve their performance. They understand the principles of life – You are either growing or dying, there is no standing still.
A great example of this is Michael Maguire, NRL Head Coach South Sydney Rabbitohs. Through working with Michael, I see firsthand someone who is passionate to learn more and not afraid to change in order to grow. He continually searches for, and more importantly, is open to implement new ideas and information to improve the individual, the team and the organisations overall performance!
Final Point – Make Change:
- Build Your Scoreboard – Accurately record and report all of your financial transactions.
- Profit – Calculate out how much Profit you are actually making on each job.
- Breakeven Point – Calculate what it costs you to run your business (insurance, vehicles, office costs, etc.) in overhead expenses.
For more information how to build your Scoreboard email firstname.lastname@example.org or visit www.www.cubeperformance.com.au or call us on 1300 665 922.
Get excited about your business!!
For more information on our programs to develop your business skills – CLICK HERE
OR call us on (02) 8011 4855 or 1300 665 922 or email us at email@example.com