Why do most business owners run their businesses without a solid foundation? You wouldn’t think of building a house without putting that essential first layer into place, would you? A solid foundation can be as basic as ensuring you are set up with the correct entity. It also includes having a vision or plan for your business and developing systems and processes to run the day to day affairs of your business. One piece of a solid business foundation that most businesses have in common is that they don’t blindly handle customer satisfaction—they carefully monitor their clients’ satisfaction every step along the way. The reason for this is simple: On average, it costs five to six times more to get a new customer than to keep a current one. So simply put, it’s more cost effective to put your effort into keeping your customers happy than to focus efforts on marketing to new customers.

In addition to being more cost effective, keeping your customers happy can bring you additional business. In one study conducted, as much as 14% of a company’s business came from customers who were referred by current customers. Happy customers will also be recurring customers; people are 10% less likely to shop around if they’ve used your company before and were satisfied with the experience.

If You Can’t Measure It, You Can’t Improve It. Management thinker Peter Drucker is often quoted as saying that “you can’t manage what you can’t measure.” Drucker means that you can’t know whether or not you are successful unless success is defined and tracked.

Analysis is a way to measure the profitability and track your performance. The product of bookkeeping is financial statements. Financial statements should be regularly generated and used for analysis.

While analyzing financial statements, you can track your cash inflows and outflows and many other metrics that will help you learn more about what is working or not working in your business. 

While financial analysis is important in your business, the “analyze” piece can also be applied to other aspects of your business such as marketing, sales, operations, HR, and other key functions.

You’ve likely heard about the importance of writing down goals for your personal life. According to a 1979 study conducted by the Harvard MBA program, writing down goals for your future will make a huge impact on your lifelong success. In this study, they interviewed a number of graduate students and asked, “Have you set clear, written goals for your future and your plans to accomplish them?”

Of those surveyed, only 3% had written down their goals and plans. 13% stated that they did have goals but had not written them down. 84% of the respondents stated they did not have any specific goals at all. When these students were interviewed again ten years later, the differences in their levels of success were astounding.
On average, the 13% who had unwritten goals earned twice as much as those who had no goals. And the 3% who had written their goals down? On average, they were earning ten times the amount of the other 97% of their class!

So what does this mean for your business? To put it simply, writing down the goals you have for your business will be the foundation for future success; however, surprisingly, 46% of firms don’t have a strategic plan or goal for their business. These goal-lacking firms experienced significantly less growth than the firms that did have written goals and plans.

So now that you have the secrets of the most successful accounting firms out there, what else are you waiting for? Start implementing these changes in your own business today, and watch your business grow! You not only measure performance so you can improve it, but you instantly spot weaknesses in your company. And those are the areas you should focus your attention on. We would love to sit down with you for a Needs Analysis Consultation and even help you integrate some proven solutions to improve your business. 

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