InHouseCFO's Small Business Blog

The Key to a Successful Business

Posted by Donald Cameron on Sat, Sep 01, 2012

So, welcome to the InHouseCFO Blog. I won't be wordy, hopefully just informative. What I want to speak about here are the key items (other than having a product or service that works, AND is what people want) to a successful business. Remember, I'm coming from the perspective of a control freak, who thinks the ultimate measure of a business' success is measureable, usually in terms of money.

So, if that is truly the case, then it goes without saying that every successful business would have one thing in common - a measuring system that provides the owners/management results that are:

  • Relevant;
  • Accurate;
  • Timely; and
  • Informative.

Easy to say, not as easy to do. First off, the business needs to identify what results are relevant.

In one business that we are involved in this means sales leads, demonstrations done, quotes issued, orders booked, then sales completed. The first 4 of these come well before money ends up in the records, but are obviously very key in generating that.

In another, it is phone calls received, qualifying appointments booked, surgeries done, then reveune from medical procedures performed. Again, 3 are before money changes hands.

These key metrics need to be measured religiously, constantly, and summarized in a timely informative way so the business managers can assess the success of their efforts. A business' information system must be capable of capturing these, and its Finance department must be attuned to reporting and interpreting these so a business can identify well ahead of it happening what the prospects for cash flow are.

If your Finance department isn't actively doing this, then it's not doing its job for you.