Molen Model for Business Mastery
Molen Model for Business Mastery
Most business owners are in business for the purpose of making money. There are usually other factors, but this is a major driver. Wouldn’t it make sense to consult with someone on a regular basis to make sure that your business is designed and aligned to exactly that? Our Business Mastery process focuses not only on the financial aspects of your business, but takes a step back to analyze your business holistically.
Over the last 40 years, we have refined our processes and systems to more effectively help business owners like you. Each time we sit with a new business owner, we dig a little deeper and delve into the secret habits of successful businesses. At Molen & Associates, we are education focused and want you to be able to benefit from the tips and tricks we have picked up over the years. During our “Needs Analysis” consultations, we walk step-by-step with you to find areas to focus on for optimal business growth. These steps include: Foundation, Record, Analyze, Comply, Forecast, Breakthrough.
Foundation
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.
Record
The reason we designed this model as a pyramid, beginning with the bottom as a foundation building to the top is because each layer builds on the previous.
You need to have a foundation first. Once this first layer is more or less in place, you can begin worrying about record keeping. If you skip forward to the next steps, you cannot complete the analysis, compliance or forecast steps and definitely not the breakthrough step without these first two stages of the model.
Bookkeeping is important in order to maintain accurate financial records. Yet still, many businesses fail to implement this integral process. Besides the fact you are required under law to maintain accurate books and records, doing so will save you frustration later on.
While it may not seem like much, poor accounting and record keeping is one of the top reasons businesses fail. Without bookkeeping and accounting, you are blindly driving your business.
Analyze
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.
Comply
RCompliance means following the regulations set by any governing bodies in your industry. If you are in business in the United States, this means following GAAP principles, filing tax returns and payroll reports. If you build your business starting with Foundation, Record and then Analyze, you should have accurate financial statements.
One of the most important uses of your financial records is to help you comply with federal and state tax laws and prepare your annual tax return. Doing this and keeping a good bookkeeping system will help make dealing with Uncle Sam relatively painless.
Planning is the key to successfully and legally reducing your tax liability. By looking forward at what your future plans are, you can reduce the amount you pay in taxes and still keep your business in compliance.
Forecast
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.
Breakthrough
Getting your team on board and ensuring they understand your goals will encourage employee engagement. However, suffice it to say that engaging your employees with an inspiring vision and a clear goal will help your business experience exponential growth and success.
Earlier, I mentioned a quote by Peter Drucker. Another famous quote by him is “leadership is doing the right things.” My question for you is – Are you doing the right things to improve your business?
Don’t Wait – Start today!
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.
