Call yourself a Managing Director but you don’t have an accurate handle at any one time of the financials of your business? This isn’t on.

Measuring the finances of your business is an essential part of managing the business and is a critical element of sound decision-making and future planning. Many business owners delegate the financial matters to other Directors or to their accountants and often cite that they “prefer to look after the sales function or the front line team.”

Let’s be clear that the role of Managing Director has ‘managing’ in the job title. Those who prefer to “be hands off” the day to day financials are unaware of impending disaster until it is too late.

The production of regular financial accounts are vital to accurately assess the financial health of the business and this becomes even more imperative in difficult times. The UK could be on the drink of a double dip recession. Let’s make the decision to raise the bar on our financial acumen FAST to ensure we don’t have to head for the lifeboat.

Schedule some time in your diary to work on answering the following questions. Record the questions and answers in a journal or on your computer. You will be pleased you have done this exercise!

TEST YOURSELF – Score yourself between 1 to 10 (10 being top score)

• How well do you think you know your business?
• How much cash is in the business this month?
• And how much last month?
• What are your budget sales this year?
• What’s your year-end date?
• How much debt does the business have right now?
• How much is owed by customers?
• Who is your biggest outstanding trade debtor?
• How much is owed to the bank etc?
• How much do you need to sell each month to break even?
• What’s your gross margin % on your best selling product?
• How quickly do you turnover your inventory?

Look out for my future blogs on FINANCE as we will cover profitability, cash & working capital, measurement, basic accounting topics, budgeting & forecasting, guarding your business and tax requirements.
In undertaking the above test you will have a clearer sense of how much you do know and don’t know about your company’s financial health.

Before you need to call in the ‘doctor’, prescribe yourself a ticket to our One Day TOTAL Business Mastery Seminar. The next one takes place this coming Saturday.

Jamie Constable