Financial Accountability - Guiding You to Profit
Financial Accountability is Your Roadmap to Sustainable Business Growth
Action springs not from thought, but from a readiness for responsibility. – Dietrich Bonhoeffer
These words resonate deeply with the essence of financial accountability, a subject that often gets side-lined in the hustle of running a business.
But what if I told you that the art of being financially accountable can help steer you not just towards survival but to true business success?
This episode is all about dissecting the backbone of financial accountability and helping you understand how keeping a tight rein on your finances can set you on a clear, effective path to your goals.
We'll delve into why financial accountability matters so much and how you can cultivate it through practical steps and consistent reflection.
If you’ve ever found yourself wondering, "Am I doing enough to manage my business's finances responsibly?" then you’ve found the right episode.
Once you’ve listened, you'll find yourself better prepared to handle the monetary aspects of your business with confidence and precision.
You’ll walk away equipped with actionable tips and strategies that promote financial health and long-term sustainability. The knowledge I'm sharing here is tailored to not only reduce your financial stress but also enhance your decision-making process, ensuring you stay on track even when the unexpected happens.
Just like a diligent navigator, financial accountability keeps you on course and ready for the challenges ahead.
Remember, it’s not about achieving perfection; it’s about making progress.
And as always, Numbers Knowhow is here Helping you to Plan It, Do It, PROFIT.
Transcript
Action springs not from thought, but from a readiness for
Speaker:responsibility. Dietrich Bonhoeffer's words may not sound like
Speaker:your traditional financial advice, but they hold the key to
Speaker:today's topic, financial accountability. Now,
Speaker:financial accountability isn't just about keeping track of numbers.
Speaker:It's about staying on course, adjusting your course when
Speaker:necessary, and always aiming for that big goal.
Speaker:Your northern star, your end point, your destination. But
Speaker:before we get too far ahead, ask yourself this question. Do you
Speaker:hold yourself accountable for how you manage your business's finances?
Speaker:If you're unsure, or think I could do better, then stick around. I'll be
Speaker:sharing why this matters, how to stay accountable, and I'll be sharing practical
Speaker:tips to help you along the way.
Speaker:But why is financial accountability like a road trip? Well,
Speaker:imagine you're planning a road trip. Your destination, let's just say
Speaker:Cornwall, for a relaxing seaside break. Summertime,
Speaker:obviously. Would you just hop into the car and start driving?
Speaker:Of course not. You'd plan your route, check the fuel gauge
Speaker:and make sure you've packed the essentials. Running your business without
Speaker:financial accountability is like driving without a map.
Speaker:You might still end up somewhere, but it probably won't be where you want it
Speaker:to go. Worse still, you could run out of fuel for fuel.
Speaker:Think cash. Financially speaking, halfway through the journey.
Speaker:In business, your financial story plan is your map.
Speaker:It lays out the route, your northern star, your ultimate goal, your destination
Speaker:point. Whether it's reaching a profit milestone, launching a
Speaker:new product or achieving a healthier cash flow, your
Speaker:plan outlines how you will get there. Now, your
Speaker:financial story plan is also your accountability buddy. Now, here's
Speaker:the thing. When we are left our own devices is very
Speaker:easy to drift off course. That's why people hire
Speaker:personal trainers, to have someone keeping them accountable. And in
Speaker:business, your financial story plan acts as your personal trainer.
Speaker:It keeps you honest, it keeps you focused, and it keeps you aware of
Speaker:the progress that you're making. Now, this plan isn't just a one off
Speaker:task, it's a living. It's a breathing document. It
Speaker:includes your profit goals, your expected expenses,
Speaker:the resources you will need. And it's not just cash, by the way, the
Speaker:actions required to meet your targets. But just like a sat nav, it
Speaker:only works if you actually use it. You mustn't let your financial
Speaker:story gather dust in a drawer or on your computer. Refer
Speaker:to it, reference it on a regular basis and check if you're still heading
Speaker:in the right direction. Now, every plan needs you to
Speaker:monitor, adjust and reflect. Now, supposing what happens if
Speaker:you hit Unexpected traffic or a road closure? Do you give up
Speaker:on the trip? Of course not. You re route, and business
Speaker:is no different. Monitoring your finances allows you to
Speaker:adjust when the unexpected happens. Now, here's what you should be
Speaker:checking on a regular basis. Are your sales matching your forecasts? Are
Speaker:your expenses higher than your plan to be? Is your profit where it should
Speaker:be? What does your cash flow look like compared to where you thought
Speaker:you would be? Your digital accounting system, by the way, is
Speaker:your dashboard? Is your engine? Is your financial
Speaker:ecosystem showing you the reality of your business? Just like
Speaker:checking your car's speedometer and fuel gauge. And if you're not using a
Speaker:digital system yet, folks, then you're missing a trick. Now, for
Speaker:me, a financial story plan is like hitting the gym. Let's
Speaker:just switch gears for a moment. Think about your fitness goals. Say
Speaker:you want to run a 5K in under 30 minutes. You you'd set up a
Speaker:training plan. You track your progress, and you reflect on what's
Speaker:working. If you're not improving, you'd ask yourself, am I training enough?
Speaker:Is my diet supporting my efforts? Am I over training and risking
Speaker:injury? And the same principles apply to your financial
Speaker:accountability. If your profit margins aren't improving or your
Speaker:cash flow feels tight, ask yourself these questions. Are you
Speaker:overspending? Are your prices right for your market? Are there
Speaker:external factors that have impacted your plan? Are there things that you
Speaker:haven't implemented that you said you would do? By reflecting and
Speaker:adjusting, you get back on track. And financial accountability isn't
Speaker:about beating yourself up when things go wrong, and they will go wrong, but it's
Speaker:about learning and improving. There are emotional benefits
Speaker:also of accountability. Now there's a surprising benefit.
Speaker:Financial accountability does reduce anxiety.
Speaker:When you know where your business stands and where it's heading,
Speaker:you're less likely to feel overwhelmed. You're less likely to get caught
Speaker:out by surprises. It's empowering to see the numbers and say, I know
Speaker:what's going on and I can handle it. Even if you do hit a few
Speaker:bumps along the way, that's fine. It's okay. Remember,
Speaker:progress isn't a straightforward linear progression.
Speaker:Sometimes it's two steps forward, one step back. But as long
Speaker:as you keep moving towards your goal, you're winning.
Speaker:Let's look at some practical tips to stay financially accountable. And let's
Speaker:break this down into actionable steps. Number one, create
Speaker:your financial story plan. Start with your northern star, your destination
Speaker:point, and work backwards. Produce the activity plan
Speaker:to get you to that end point and break it down into milestones along
Speaker:the way. Small milestones are better than one large,
Speaker:humongous milestone. Number two, absolutely critical.
Speaker:Use a digital accounting system to take the heavy lifting out of the
Speaker:record keeping. It's going to help you track sales
Speaker:expenses, your cash flow, give you powerful insights.
Speaker:And if you link it up with something as powerful as budget wears, you're
Speaker:entering into a changed landscape. Number three,
Speaker:review your progress on a regular basis. I suggest at least
Speaker:once a month, but key metrics like cash flow might need
Speaker:weekly or sometimes daily attention. Number four,
Speaker:reflect on deviations, deviations from the plan which are
Speaker:either good or not so good. If something's
Speaker:off, figure out why is it external factors beyond
Speaker:your control, assumptions that you've made that haven't quite
Speaker:been correct, things that you haven't yet actioned.
Speaker:Number five, celebrate those milestones. Recognizing
Speaker:your progress as you go along keeps you motivated even if you're
Speaker:not yet at the finish line. Recognizing the achievement of those
Speaker:milestones really reinforces and gives you that motivation
Speaker:to continue. So what can we say in conclusion? Well, let's wrap this one
Speaker:up. Let's remember that financial accountability is about
Speaker:owning your journey. It's not about perfection. It's
Speaker:about progress. And your financial story plan is your
Speaker:guide. Your digital accounting system is your dashboard, and your regular
Speaker:reviews are the pit stops that keep you going. What do you think,
Speaker:folks? Are you ready to embrace financial accountability? Let me
Speaker:know your feedback and questions that could inspire a future
Speaker:episode. Until next time, keep your eyes on the road, hands on the
Speaker:wheel. You've got this.
