Do you Suffer from End of Quarter Confusion?
Posted on March 29, 2016 by Cindy Gordon, One of Thousands of Business Coaches on Noomii.
Entrepreneurs who use their quarterly results to assess their progress feel in control of their outcomes and excited about their business.
We’re quickly approaching the end of the first 3 months of 2016 – or as my husband says “end of Q1”. For some business owners, it’s just another day in the life of…. They go merrily on their way slogging along hoping their business will grow and things will improve.
At the other end of the totem pole are the owners who are pro-active about their business. They have set their goals for the year, their quarterly targets and have critical business metrics in place to monitor their results. They are consistently tracking the activity and progress of the business. At the end of each quarter, they look at the overall results in relation to the desired results (goals) and reassess the strategies and tactics that were in place. They’ll talk to their team and make revisions where required. These revisions will layout the plan for the next quarter to help the company meet the new goals and targets. It’s a very systematic and dynamic process that accelerates the growth of the company.
Then there’s the majority of owners who are somewhere in between. They have some understanding of their numbers – maybe they look at their revenue growth and net income on a monthly basis, maybe they have some general goals set out for their team. They’re basically skimming the surface of their business as a leader while spending more time in the weeds.
It’s this vast majority of entrepreneurs who suffer from end of quarter confusion. Is it you?
Do your eyes glaze over when you see all the different numbers on your financial statements?
Do you start to feel overwhelmed and unsure about where to start?
Are you uncomfortable setting specific and quantifiable goals for yourself and your team because “you never know what may come up” at any point in time?
Staying stuck in this confusion isn’t going to help you grow your business!
Tips on how to start reducing your end of quarter confusion
1. Set clearer goals
“Grow my business year over year” is not a clear goal!! “Increase gross margin dollars by 10% in 12 months” is much better (unless there is no way you could realistically achieve this). By using the “SMART” goal methodology you’ll be able to better communicate the direction of your business to your team to get their help as well as having a clear target of where you want to go.
It’s important to take this to the next level by breaking down your annual goal into quarterly targets so you can regularly gauge how you’re doing. Like other savvy business owners, you’ll be able to properly evaluate the tactics and steps you currently have in place to see if they are working or not.
2. Understand what is critical to measure in your business
Not all numbers are created equal. Some are more useful and relevant to the achievement of your goal. For the example above, it’s quite obvious that gross margin change will be important to monitor. However, there may be other measurements that impact gross margin that will give you important information to help you achieve your goal. For example, if you manufacture a product for sale, the number of units produced per hour would help you monitor the productivity of the process. By improving this number, you’d be able to make more money per unit – leading to an increase in gross margin dollars. Looking at gross margin increase each month or quarter is like a dermatologist looking at a rash. To better diagnose the problem, she’ll need information at a more cellular level. Same thing with your business. Uncover the information that is at a cellular level to make better diagnoses.
3. Ask for help
If you’re still confused – or maybe more confused (yikes!) it’s time to ask for help. It’s vital to continuously grow and learn as an entrepreneur and leader. If you don’t grow, how can your business? You may convince yourself that you can’t afford to hire a business coach, but how much is it costing you by not getting help? Remember, doing nothing is a choice, and there is always a cost associated with your choices.
Cindy Gordon, founder of Culture Shock Coaching, rescues overwhelmed business owners from the chaos of their business by giving them focus and structure, so they can grow and scale their business much quicker with less stress.
