Are you feeling uncomfortable about the financial health of your business?
Do your financial results (and cash flow) feel like a surprise every month?
Do you have a clear view into where your cash is headed over the next 6 to 12 months?
If you are feeling uncomfortable right now about the financial health of your business, I’d like to help. I want to share with you some insights from an experienced business owner about a surprisingly powerful tool for helping you move from discomfort and dissatisfaction about your business… to financial happiness and peace of mind.
At the heart of providing “adult financial supervision” in a business (a term I lovingly use to refer to wise, experienced financial counsel and coaching) is creating a clear view through the financial windshield of your business. I do that by creating a reliable financial forecast.
A reliable financial forecast is a powerful tool for helping you improve the financial health of your business… no matter how small or how big your company is. Most large companies use the tool religiously. Unfortunately, many smaller businesses don’t.
But think about this for a minute. If you are driving on the highway at 70 miles per hour, it doesn’t matter whether you are driving a small car or an 18 wheeler loaded with cargo, you still need a clear view through the windshield to help you get to where you are going safely. In this case, size really doesn’t matter!
Small or large, you are putting yourself and others at serious risk if you drive (or operate a business) of any size without a clear view through the windshield.
Three Powerful Insights from an Experienced Business Owner
I enjoyed and was challenged by the ‘think top-down, not bottom-up’ approach Philip Campbell teaches in this book. It will change the way you think as a business owner and help you drive different behavior throughout your company. A Quick Start Guide to Financial Forecasting is easy-to-read and provides engaging stories and examples you will find very relatable… and actionable.
I believe a business owner that is making some money, but not getting where he/she really wants to be, will benefit the most from this book. Sometimes business owners find themselves depressed for not having done ‘all the right things’. This book will inspire you to buckle down, take steps to create a reliable, top down overview and forecast, then hone in on where your business is truly going. THEN you can align it to where YOU want it to go!
I also believe that business owners that might not be making money, those that may have overpaid for their business or are overleveraged, will discover that Philip’s approach to financial forecasting will play a large role in their recovery.”
—John Albers, President/CEO, The Albers Group, LLC
This is a note to me from an entrepreneur that I included on the dustjacket of my most recent book A Quick Start Guide to Financial Forecasting. I love this note because it highlights three insights that many entrepreneurs and business owners will find useful.
The first insight is where John says “I enjoyed and was challenged by the ‘think top-down, not bottom-up’ approach Philip Campbell teaches in this book. It will change the way you think as a business owner and help you drive different behavior throughout your company.”
Using a top-down, not bottom-up approach to creating a reliable financial forecast for your business will “help you drive different behavior throughout your company”. I know it might be hard to believe that a financial forecast can help you drive improvement in your business. But I have seen it many, many times throughout my career as a CFO.
There is a certain magic that comes out of the process of thinking through your big-picture drivers of financial results and cash flow. It helps you take yourself up to the 30,000-foot level and look down on what’s going on in your business financially as you forecast (or as you evaluate a forecast that an advisor has prepared with, or for, you).
You begin to see problems and opportunities in a new way. It becomes clearer to you what your financial priorities and initiatives should be over the next 3 to 6 months to help you influence and improve the key drivers of financial and cash flow success.
The second insight is where John says “I believe a business owner that is making some money, but not getting where he/she really wants to be, will benefit the most from this book. Sometimes business owners find themselves depressed for not having done ‘all the right things’. This book will inspire you to buckle down, take steps to create a reliable, top down overview and forecast, then hone in on where your business is truly going. THEN you can align it to where YOU want it to go!”
It is very common for a business to be making a little money, but the owner still has that nagging feeling inside that things are not right. That the financial health of the business is not where it should be. The owner is not totally unhappy about the financial health of the business, but they are not happy either. They feel like they are in a “so, so” kind of existence (financially speaking).
This creates a disturbing feeling inside where “business owners find themselves depressed for not having done ‘all the right things’.” They feel ashamed about business or financial decisions in the past that did not work out well. Or they feel guilty because they did not seek out wise financial counsel or advice in the past.
John’s point was that the process of creating a reliable financial forecast, the process of painting a picture of what your financial results and cash flow will likely be, gets you engaged in thinking about the strategic view and direction of where your business is going. “THEN you can align it to where YOU want it to go!”
The third insight is where John says “I also believe that business owners that might not be making money, those that may have overpaid for their business or are overleveraged, will discover that Philip’s approach to financial forecasting will play a large role in their recovery.”
John’s insight here is like the experience of the business owner that is making a little money, but not really satisfied with the financial health of their business. It is similar in that one of the benefits of creating a view through the financial windshield of your business is that it walks you through a revealing peek inside the financial reality of your business. It stimulates you to think big picture… while at the same time gently forcing you to confront the financial reality of your business.
Confronting the financial reality of your business brings focus to the parts of the business that are underperforming. Or it shines a light on the degree to which you have too much debt and gets you thinking about the implications of servicing that debt. I have seen many times where this process can become step 1 to an exciting review of opportunities that can help you create change and financial improvement.
Sometimes necessity is the mother of invention. A clear view of your existing problems and challenges can sometimes be the catalyst for creating the kind of change that leads to a bigger and brighter financial future for your business.
Small Hinges Swing Big Doors
Financial forecasting is a powerful business tool all by itself. But what excites me even more is the way a reliable financial forecast opens the door to even bigger benefits in your business. It starts by providing you a clear view of where you are going financially. It shines a light on the dangers and opportunities that lie ahead on your journey to grow and succeed in business.
Then even larger doors begin to swing open.
As you make forecasting a part of your monthly financial rhythm, you begin to develop a deeper understanding of your business model and the key drivers of financial results. It creates clarity for you and your management team about what financial success should look like. It highlights the specific drivers of profitability and cash flow that are ripe for improvement. You and your team begin to better understand the financial statements and begin using them as a decision-making tool. It becomes so much easier to respond to the curve balls that business will throw at you from time to time.
Your confidence goes up. The business becomes easier to manage. You spend less time fighting fires. You reduce risk. You free up more of your time to focus on the parts of your business you enjoy and the areas where you can make the biggest impact.
And it all starts with a reliable financial forecast.
Becoming a Happy Owner
My primary objective in creating a reliable financial forecast in a business is to help the owner or CEO improve the financial health of their business. A big picture, top-down forecast will help you:
- Define where your business is going financially (and where you want it to go).
- Shine a light on the dangers and opportunities that lie ahead of you on your journey.
- Create a roadmap to get you there safely and on time.
- Monitor your pace and progress on your journey to success.
When you know where you are going and you have a plan to get you there safely and on time, you will feel a sense of courage, confidence, and peace of mind. This is why financial forecasting is such a powerful tool in business.
In essence, it forces you to think strategically about your business and where you want your business to go. It encourages you to paint a picture of what business and financial success looks like in a way that is revealing and enlightening.
In Chapter 2 of my book A Quick Start Guide to Financial Forecasting, I talk in detail about some additional benefits of a reliable financial forecast that I have personally experienced and that I have seen other entrepreneurs and business owners experience. Here is the list:
- Create the view through the financial windshield of your business.
- Develop a deeper understanding of your business model.
- Strengthen your leadership muscles.
- Help you stop doing things that lose money.
- Prevent poor financial decisions.
- Turn financial statements into a decision-making tool.
- Anticipate the financial implications of growing your business.
- Tap into the power of a strategically focused CFO.
- Transform your accounting function into a strategic asset.
- Promote a deeper understanding of your financial statements.
- Reduce the risk of error in your financial statements.
- Reveal answers to your month-to-month business and financial questions.
- Create a tsunami warning system for your business.
You will be pleasantly surprised by the confidence and courage you feel once you have a reliable financial forecast at work in your business.
Which leads to an important question for you: Are you happy with the financial health of your business? Now is the perfect time to make a commitment to work on improving the financial health of your business.
Here is a link to the Table of Contents for my book A Quick Start Guide to Financial Forecasting. You can get a complimentary peek into parts of the book to see if you like what you see.
A reliable financial forecast can be a surprisingly powerful tool for helping you move from discomfort and dissatisfaction about your business… to financial happiness and peace of mind.
It can help you become a Happy Owner. 😊
Philip Campbell is an experienced financial consultant and author of the book A Quick Start Guide to Financial Forecasting: Discover the Secret to Driving Growth, Profitability, and Cash Flow and the book Never Run Out of Cash: The 10 Cash Flow Rules You Can’t Afford to Ignore. He is also the author of a number of online courses including Understanding Your Cash Flow – In Less Than 10 Minutes. His books, articles, blog and online courses provide an easy-to-understand, step-by-step guide for entrepreneurs and business owners who want to create financial health, wealth, and freedom in business.
Philip’s 35 year career includes the acquisition or sale of 35 companies (and counting) and an IPO on the New York Stock Exchange.
A Quick Start Guide to Financial Forecasting
Discover the Secret to Driving Growth, Profitability, and Cash Flow Higher
This book provides a straightforward, easy-to-understand guide to one of the most powerful financial tools in business: a reliable financial forecast. It will transform the financial future of your company and help you make better, faster, smarter financial decisions.
Too many entrepreneurs and CEOs today are feeling more like passengers than drivers in their business. They’re staring at their rearview mirror as they bounce along in the passenger seat. Their company is careening along on the highway of business as they wonder and worry about where their business might end up financially.
A reliable financial forecast solves this problem by providing a clear view through the financial windshield of your business. It creates the visibility and clarity you need to drive your company toward a bigger and brighter financial future.
What if you had answers to questions like:
What’s about to happen to my profitability and cash flow?
How much cash can we distribute to the owners of the business?
How long will it take to pay off our debt?
What will our taxable income be this year?
A reliable financial forecast puts the answers to these questions at your fingertips. It helps you take control of your profitability and cash flow because it gives you answers to the most important financial questions you have to deal with every day.
Put yourself in the driver’s seat of your business by tapping into the unique and exciting benefits that financial forecasting can unlock for you.
If you already own the book, the free tools and downloads are waiting for you. Click here to access the financial spreadsheets, examples, rapid learning guides, and more.