As we hit the halfway mark on the year, I like to take a look back at several things at CPA On Fire. I would encourage you to do the same with your business. Start by looking at the following:
- Take a hard look at the last two years – how far have you come and how far has your company come?
- Take a look back at the last 6 months – your learning experiences, any confidence boosters that you had. Where did things go right? Where did they go wrong?
- Look at the 3 year forecast of your business.
- Budget for the rest of the year. Where are you now financially? Where would you like to be at the end of the year?
- What have I accomplished in the first 2 quarters of the year?
- Look at the next 90 days and determine what goals you want to accomplish within those 90 days. Do you wish to bring on a certain number of clients? Do you want to bring on a specific marketing company?
We have our clients come to us at times and say “Hey I want to hire another full-time employee” or “I want to partner with this marketing company that charges $5,000/month; can I do that?” and we are able to help them determine those things through their current income and future income projections. Predicting revenue can be complicated and that is why we are here.
How we approach it with our clients is a sort of reverse engineering process. We look at their goals from a net income perspective and then take a look at where they are currently. Are they on pace with their goals? Are they ahead or behind? We start there and work backwards; we look at profit margins, we look at gross margins, what it takes to get a paying customer, expenses, closing percentages, etc. All the nitty gritty numbers that come with running a business. That is part of how we determine where your business is financially. From there, we can help you determine how much you can reinvest into your business.
It is extremely important to revisit these goals and numbers every quarter and course correct when needed. Ultimately you want to be thinking about where you want to be on December 31st. Are you on the right track to be at that point? Make sure you think about that every quarter.