The Rest of the Year (August 2014)

As we enjoy Labor Day weekend I hope that everyone reading this is getting the opportunity to relax with family and friends. As we exit the summer vacation season, during which it seems to sometimes be nearly impossible to schedule a meeting with more than two people due to travel schedules, it’s time to get back to work. There are four months left in 2014. What were the goals that you had for the year and where do you stand against them? What can you achieve in these remaining four months?

If you have not revisited your 2014 profit plan, I’d encourage you to take the opportunity to do so now. If you are one of those companies that operate without a plan, this is a great time to plot out the next four months. The short term horizon is the perfect opportunity to get your feet wet with developing a plan and then measuring against it for the balance of the year. For those experienced in annual and long term planning, it’s not too early to be thinking about 2015.

I have taken the time in recent months to revisit 2014 with several of my clients. Let me share two of those examples.

In one case, we were generally on track but had some surprises along the way. While I am a strong believer in the value of developing a plan for the year, I never pretend that I can predict the future. We took the time just after we passed the mid-year mark and reviewed what went according to expectations and what hadn’t. We determined where we needed to make mid-course corrections in order to achieve the goals we set out when we developed our 2014 plan (which was last October – well before we knew exactly how 2013 would end). The end result was that we made some decisions about the last few months of the year in terms of operational items and the revenue goals we would need to achieve our 2014 profit plan. As we move through the last four months of the year, we’ll continue to monitor where we stand and drive toward our goal.

In another case, we knew we had lost our way some time ago. Conditions and circumstances simply did not turn out as we expected. The reasons are far less important than the response. We took a fresh look at the second half of the year and talked about hiring strategies for 2015 and what the year might look like. We discussed what we had thought coming into the year versus what actually transpired. As we did this, we developed a better understanding of customer longevity and discussed the longer term (3-5 year) implications of this knowledge on our longer term business plan.

The new insights gained by asking why some results didn’t turn out as expected is one of the most valuable parts of the financial planning process. If one continually asks “why” questions, they’ll gain new insights into their business and then be able to incorporate those into operational and long term strategic decision making. Incorporating that same knowledge into the financial planning process will allow them to develop more realistic projections of the future.

I hope you enjoy the rest of the Labor Day weekend and give some thought to the rest of 2014 this upcoming week.

If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to [email protected]
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