June, a recent client, told me that she wasn’t sure that she was doing things right when it came to the financial side of her business. When I first told her what I did for small business owners, help them get more profitable through accounting and finance, her eyes glazed over. Here’s exactly what she said to me, “I don’t know what I don’t know. Numbers scare the shit out of me.”
But here’s the thing, she already knew A LOT! She knew that there were things about financial operations and management that she really needed to know in order to grow her business profitably, and that she wanted to know what those things were, then understand them.
So here’s how I broke it down for her.
Think of your financial operations as a pie divided into three slices, like this:
photo by Monique Lusse, 2017
Anything you do in your business falls into one of those three categories: strategy, execution, analysis. Of course, each has sub-categories, and they have sub-categories, and those are covered in other posts; for right now, let’s just think about the meta view.
Here they are defined:
Strategy – how to think about what you want to do. This is about your ideas; it’s where you do research, examine your options, then pick one.
Execution – how to do what you strategized about doing. This is about hands-on implementation of that one option, making the idea a reality.
Analysis – how to interpret the results of the execution of the strategy. This is where you crunch the numbers and turn the data into information.
And then you do it over again in another round based on output from the first round. That’s right: rinse and repeat. The cycle never ends as long as you’re in business. It’s a constant iterative process.
When I laid out these three concepts to June, she let out a deep breath and smiled. “Oh, that’s so simple. I get that. I thought it would be much more complicated and I’d need an MBA to understand it.” she said. “It’s not so scary after all.”
Remember, anything you do in your business is either strategizing, executing, or analyzing. The trick is to do them in sequence. Strategize first, then execute, then analyze. And depending on the project at hand, this process can take 10 minutes, 10 hours, or 10 months.
Let me ask you…what area are you stuck in or confused about right now in your business? Ask me in the comment section below and I’ll be happy to unpack it for you.