They say the risk of insult is the price of clarity. And in the spirit of hard truths that can save your business, I’ve got to share the one thing I tell all my clients:
You’re special . . . But you’re not that special.
Almost every client I work with comes to me with a convoluted financial model or insane Chart of Accounts.
But the reality is, every business operates under the same fundamental principles: money comes in (revenue) and money goes out (costs). Whatever you’ve got leftover is your profit.
Sure, there are times in business when it pays off to be special.
For example, you’ve got to differentiate your product’s unique selling point and your company’s value proposition. These elements can do wonders for your sales and marketing, and in those cases, you must dig into what makes you a standout organization and boast about it to the world.
But when it comes to your finances, that logic does not apply.
Here are two reasons why you’ve got to reframe your business and get comfortable with the idea of being totally average . . .
1: When You’re Special, You See All the Wrong Information
Many business owners come to me with the preconceived notion that they need to see a specific piece of information to understand their financial health. And if it’s not a particular piece of info, it’s a particular way of visualizing the numbers.
However, once we start digging into their statement, we usually discover that the thing they insist they need doesn’t necessarily have any value. And then we’ve wasted all that time looking at details that led us astray.
2: A Specialized Approach is a Chaotic One
Forget what your mother taught you. When it comes to finances, the last thing you want to be is the most special person in the playing field. And that’s because the more specialized you make things, the more challenging it becomes to manage and track your finances.
So just how normal should you be?
In my experience, 80 percent of your financial models, reports, and chart of accounts should resemble that of other similarly-sized companies in your industry.
If you’re finding that it’s impossible to understand your business without getting too specialized, then there’s a high probability it’s because your processes are too complicated.
Need help figuring out how to reframe your financial statements so you can bask in the bliss of being completely normal?!
Remember . . . In this ONE case, that’s okay.
Hire an outsourced CFO today, and get ready to discover how a simpler approach can help your business not only survive, but thrive.