What is “meaningful success” and how does one achieve it? Meaningful success will be different for each entrepreneur, but it can be determined by asking one simple, yet very complex question.
“What do you want to accomplish with your business?”
When we ask business owners this question, we get a mixed bag of responses including; “We want to create the best product or service in the marketplace”, or “We want to be the most desired place to work in the city.” Oftentimes the answer includes achieving a certain level of revenue and profit within a certain number of years, which is certainly the case for any angel or venture backed high-growth company.
While the answers to the question are varied, there is a common formula that when followed will allow one to achieve meaningful success.
Business Success = Execution + Planning + Strategy + Financial Modeling + Accounting
Business owners must be amazingly good at execution. They must deliver sales, manage day-to-day operations, take care of their customers, manage product development, manage cashflow, and pay their vendors. It’s easy for this to take all of one’s time, leaving no time to focus on the future of the business.
Continuous Planning and Strategy is the discipline of identifying specific business objectives and deciding which strategies to employ to achieve each objective. It also includes identifying who on the team will be responsible for executing the strategy and determining the deadlines for when the strategy will be completed.
Financial Modeling is the discipline of utilizing historical data and financial assumptions to predictively forecast how the company will perform given its ability to properly execute the business. Good financial modeling not only predicts revenue, expenses and profit, but will also predict the cash flow requirements needed for the business. To learn more about the value of financial modeling.
“If you don’t know your numbers, you don’t know your business.” – Marcus Lemonis
Accounting is the foundational discipline for meaningful success. Marcus Lemonis famously said “If you don’t know your numbers, you don’t know your business.” Closing the books, timely and accurately each month, is the first step to truly understanding how effectively one is executing their business.
When Execution is combined with the disciplines of Continuous Planning, Strategy, Financial Modeling and good Accounting, the business owner will likely achieve their hopes and dreams and find meaningful success along the way. Focusing on the whole equation is the winning formula!
We would enjoy hearing your perspective! Please reach out with comments or questions. Please email us at firstname.lastname@example.org.