Have you ever asked yourself this question: “What am I doing all of this for?” All too often, entrepreneurs can get caught up in the day-to-day challenges of running a business and lose sight of the most important aspects of the journey.

We take on the challenge of building a business because we’re passionate about what we do, and we all know the sacrifice that it takes.  We all know the dedication that is required, when no one is watching, to launch, sustain and grow an enterprise.

But at the end of the day, what ARE you doing all of this for?

Is it to simply “have a job”?  Is it just to SAY you’re a business owner?  Of course not.

The reason we fight every day is to create VALUE.  Or better said, from my perspective, it is to create ABUNDANCE.

 It is to create resources for ourselves, and for our families. It is to create the wealth  that provides us with the time to have a more engaging and fulfilling life. It is to create the abundance that allows us to GIVE.  Give to others. Give to our community. Give to our family.

One of the biggest challenges to small business owners, is to keep our eyes on the strategic part of this mission. Like I said, we all get caught up in the day-to-day challenges, but what I want to encourage you to do is to keep an eye on your overall strategy.

You must have a goal, or a target. You must have a mission in mind. And your strategy is the gameplan you execute to get there.

Here are some questions you might have:

  1. How can I keep my “eyes on the prize”?
  2. What strategies can I focus on to build wealth and abundance?

There are quite a few answers we could discuss, but for now, I’d like to offer you four key strategies.

Key Strategy No. 1:  You MUST Have Financial Discipline

Sounds pretty basic, right? You would be shocked how many home improvement companies do not keep accurate and up to date financials. (Or wouldn’t you?)

Producing financial statements for your business is absolutely critical. At the end of the day, your profitability is what determines whether your business will survive long-term, produce the wealth and resources that allow you to improve the quality of life for yourself and your family, and service the homeowners who have entrusted their projects to you.

And there are a lot of variables that go into your profits, aren’t there?

  • Product and install costs;
  • Cost of lead generation;
  • Commissions;
  • Service and repairs;
  • Rent and utilities;
  • Insurance, and;
  • Etc…

A detailed and accurate financial statement is what gives you a representation of the financial health of your business. But what do I mean by “financial statements”?

Without getting too far into the weeds, I am essentially talking about a budget.

You must prepare a budget for your business, preferably on an annual basis, and you must be able to compare the real financial results you produce, to the budget (plan or “pro forma”) that you created in advance.

This comparison helps you to make critical decisions about your business, before it’s too late.

What’s too late?  Here’s an example: When you realize that you’ve been spending more than you’re earning for the past year, and you suddenly owe more than you’ve got in the bank!

Have you ever been in this position? Do you really know that you’re producing consistent profits?

Tips to Establish Financial Discipline

  1. Create an annual budget, right now. You must forecast your sales and expenses for the year.
  2. Keep regular financial records. If you’re not comfortable doing this in-house, hire an accountant. They’ll give you a list of information that must be supplied on a monthly basis, and produce the statements for you.
  3. Do a financial review once per month, or minimally once per quarter.

Again, I know. Sounds pretty basic, right? But believe me, unless you’re committed to this process, and your monthly/quarterly review, you’re steering your ship with a blindfold on.

Commit to These Principles

  1. I MUST have an annual budget for my business.
  2. I MUST produce financial reports for my business every month.
  3. I MUST review financials monthly or quarterly.

Once you do this, not only will you be able to make critical decisions to consistently better your business, but you’ll also sleep much better knowing that your business is heading in the right direction.

Stay tuned for the remaining three keys next month.

Ed Kalaher is the president and CEO of Window Depot USA in Canfield, Ohio.

1 Comment

  1. Thanks Ed

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