Where are You Now?

What is the situation in your business today?

Here are some criteria to get a better gauge of where you are starting from, and then you can work through the different levels and turn your business around.

1. Struggling

Here is a definition of the likely situation.

The stress levels are at an old time high and stay there. Second guessing maybe even triple guessing what every decision that is being made, getting truly little sleep, probably having dinner with the family twice a week if you’re lucky. Usually working 6 to 7 days a week, have missed most, special family events due to work commitments.

So, your confidence in what you are doing is disappearing. To top it off you are not getting paid. And if you have staff, they are earning more than you, and have less stress in the job. We will not mention the decreasing bank account or loans that are growing with very breath we take.

What is usually happening in this stage of business is – you will have some or something similar.

So, the bookkeeping is being avoided. Definitely last on the list and too scary. Working more than 60 hours per week. Accounts are done after 10:00 PM at night or later, so, a higher error rate, bank accounts were reconciled more than 3 months ago. The accounts are on the back of an envelope, the invoices and receipts will be found in your glove box, and the cost of a job or product, are paper based or guesstimate. The outstanding sales invoices are on the desk somewhere with the outstanding supplier invoices. Your gut tells you whether a product is profitable or not.

Do not have a goal, budget, or forecast in mind. You have no clue on how much money will probably come into the business in the next week or month. You only pay bills if threatened with supply freeze. Will bring on a new staff member because you are so tired.

Do not despair, it is possible to move to thriving, but things need to change urgently. And that includes your mindset.

2. Surviving

Things are not so desperate, but still not in a good place.

The stress levels are high but there are the occasional moments that they come down a little bit. Probably only second guessing your decisions now because you have a small amount of time to think through the decision. Still not getting much sleep but at least you are having dinner with the family about 3 to 4 times a week. Now that is an improvement. Working only 6 days a week but, at least that means you are getting to a few more special family events.

Your confidence is probably stabilized and is not disappearing, but not improving. You probably are not getting paid still, but the hole you are digging previously in the debt department has stopped. That shovel has been put down.

Still do not despair, take a step back and a deep, deep breath. And look at your business from a new perspective. Things need to change a lot and quickly, but it comes down to how you ought to change. And I am going to be blunt, it not really the staff or marketing etc, that must change, it is you, the owner, that needs to change in how you view the business.

Here is some of the things that are happening in a surviving level.

Spending 8 hours or more each week on bookkeeping, very manual process, still near the bottom of the prior list. Working between 50 and 60 hours per week. Accounts are done all weekend. Bank account was reconciled between 2 and 3 months ago. The accounts are in an Excel spreadsheet. Invoices and receipts were found in a shoe box or in your tray. The cost of a job or product are in an Excel spreadsheet. The outstanding sales invoices are on a list, or Excel spreadsheet, same with the outstanding supplier invoices. Your bank account balance tells you whether a product is profitable or not.

A goal, budget or forecast is in the back of your mind. On the back of an envelope is a list of what could possibly come in next week or month. You only pay bills when they are 90 days overdue. And we will bring on a new staff member because the bank balance is higher.

3. Living

So, another step closer to the dream.

The sun is shining most of the time, hope is blooming.

The stress levels are moderate. Your energy levels and excitement is growing, your purpose and clarity are dominating your decisions. Planning and time to think are fun. Finding importance in the process. Sleep is a natural part of the day. Dinner with the family, about 5 times a week, at least now feeling part of the family again. Working 5 to 6 days a week, special family events attendance, sits at 50% to 80% of the time, with a growing positive confidence level now on a onwards and upwards motion, with finding better ways of running the business. Payday is finally here. Now you are finally getting money for the effort that you are putting in.

So, here is some of the characteristics.

Spending about 8 hours each month and bookkeeping, better systems in place. finally. Working between 40 and 50 hours per week. Accounts are done after hours but before dinner time. Bank account was reconciled about a month ago. The accounts are in a basic accounting system. Invoices and receipts are digitally kept in file, less clutter and lower storage costs. The costing of a job or product are in the database, easier to look up the history. The outstanding sales invoices are in a database, but not integrated, same with the outstanding supplier invoices. The original costing plus margin tells you whether product is profitable or not.

A goal, budget or forecast was put together at the beginning of the year, has not been touched since. The database gives an idea of what is outstanding and possibly, what is coming in next week or month. And you pay bills between 60 and 90 days overdue. Increased sales volume will prompt for a new staff member.

So that dark cloud is now lifting. The sun is starting to shine brighter, the grass is growing, but do not stop the changes. There is still another level to aspire to, that is even better. Something I have learned. The more you improve your mindset health and outlook on life, clarity, direction, and happiness levels go through the roof.

4. Thriving

So, let us go to the final level, this is the ultimate stage.

Our dreams are reality.

New opportunities are in front of us ready to be grabbed hold off and experience.

The stress levels are healthy, our energy and excitement are at an all-time high. So, start dreaming bigger, plan and then grow again.

This does not have to be the business. It can be just growing more, as a personal or giving back to the world and creating a positive legacy.

It is your choice.

So, you are spending your about 8 hours per quarter on the accounts, better systems in place. Working a healthy 40 hours per week. Accounts are done during work hours. Bank account was reconciled weekly. The accounts are in an integrated cloud-based accounting system. Invoices and receipts are digitally kept and sent to software to read and automate part of the process, something like Dext. The costing of a job/products profitability are regularly check based on the analysis of current data. The outstanding sales invoices are listed in the accounting system, same with the outstanding supplier invoices. So, less time wasted trying to find the different invoices or what is out there and not known.

A goal, budget or forecast analyzed against actuals and decisions are made accordingly. Bills are paid based on a weekly rolling forecast. And the new team members are added as per that analysis plan and actuals.

So, there you have it. I was just wondering what your reflection on that would be, and where you say you are right now in terms of those 4 levels. The movement to the next stage is actually possible for every business. If you make more informed decisions right now.