How to properly manage a company (data+common sense, not intuition)?
Managing company can sometimes feel like it is an art – like it is more question of talent than diligent work. Lucky for majority of us, good management is above all hard and diligent work.
I managed a number of very different companies of very different sizes in very different industries and in very different parts of the world. This led me to the conclusion that whatever company I managed in whatever part of the world, if I relied on data and on my common sense, I was able to manage it well. Everything else was far less important for my successful work as executive, manager and entrepreneur.
The above is also one of the main reasons why I decided to found SASH reporting service, which functions like a weather station for any company – bringing company of any size and industry insight into its current condition and performance and into its future cash flow and business.
Read through for three key tips on how to manage a company.
Know where your company is at currently – tip #1
You always need to know in what condition your company is and how it currently performs. Only if you know this, are you able to take informed and right decisions. If you do not know your company’s current status, you are much more likely to take wrong decisions. The easiest way to understand your company’s current status is by monitoring and analyzing data your business produces every day. Because every business in the world produces financial data, your first focus should definitely be there. Obviously, you should also look at other business data (like website visits, number of customer purchases etc.) to get the whole picture. At least per my experiences, your financial data is key for your business decisions.
To be able to regularly monitor and analyze financial data, you need to have proper controlling and reporting system in place. Usually you need to invest quite heavily in implementation of such system and also in regular operation of such system. Big enterprises use big BI software packages with appropriate functionalities. Although they can use off-the-shelve products, they still need to invest a lot of resources to make them work properly – both in implementation and also in regular operation of such BI products. SMEs usually do their own reporting in Excel and similar tools (also SaaS tools available today), which also requires quite substantial investment in implementation and for regular use.
One hassle-free and easy way to figure out, where exactly is your company now, is also SASH reporting service. It gives you informative dashboard with clear oversight of all main financial KPIs of your company. Nice part about it is, that you do not need to invest lots of resources to get insight in your company’s business – SASH reporting services takes care of everything from acquiring and processing data, generation of reports and also of alerting you to any kind of anomalies noticed (and of any detected threats for your business). Do check it out – visit the website and request your offer – no strings attached (P.S. – do use SASH reporting special offer in May and June 2015 – including free first month).
Plan your cash flow (and your future) – tip #2
Because it is not enough to only know, where you are, you also need to know and plan where are you going and how you are going to get there. Cash flow planning is one the most underrated and underused activities in modern companies. Although it helps to boost reliability of a company for over two times! Actually, 122% more companies survive first 5 years from their incorporation, if they plan their cash flow vs. if they do not plan their cash flow. As per my experience majority of companies do not properly plan their cash flow, because very few people know how to do it properly, in a timely manner and without burning too many resources.
There are three aspects of cash flow planning:
- Short-term – for the period of next 1-2 months, on a daily / weekly basis; relatively easy, done on the basis of open items (received and sent invoices)
- Mid-term – for the period of next 3-6 months, on a monthly basis; complex, best and easiest done with help of SASH reporting cash flow projections
- Long-term – for the next year and more, on a monthly basis; based on company’s business plan
Usually companies only focus on short-term cash flow planning. This does help them with their daily liquidity, but it does not provide them with enough time to secure additional financial resources from a bank or other financial institution. Especially mid-term cash flow planning can help companies with such issues, because they are able to prepare themselves properly for the future in time.
You can find more tips on how to approach cash flow planning in post on How to manage and plan your cash flow.
Decide – tip #3
Once you have the data and insight in your company’s current and future business, you should really use common sense. I believe almost anybody possesses enough common sense for the majority of decisions they need to make. But there is one thing I need to point out. My extensive managerial and executive experiences have taught me, that one of more important qualities a good manager should possess, is the ability to decide in due time.
Decision you take as a CEO does not have to be in the form of choosing one or another action. It can also be, that you will not take a decision regarding one or the other action now, because you need more information. And this is OK, as long as you clearly communicate to relevant parties that your decision is not to take option 1 or option 2 (or any other option) decision now. Because one of worst things in a company is, if nobody knows, what is going to happen – everybody prefers to have a stable environment – to know where they stand and where their company stands.
More tips and resources
As already mentioned, do make use of SASH reporting services – just click to www.sash-reporting.com and request your offer. Or you can also read Why do you sleep better with SASH reporting.
If you want to learn more about being a manager, please read also my post What managers do? 10 key activities you need to master as manager.
If you find the post above or any other article mentioned in this post useful, please do share. I would also be happy to get your feedback.
About author
Darko Butina is experienced executive, who was acting in very diverse industries, all the time leading companies ranging in size from zero to half a billion EUR revenues. Darko is founder of SASH reporting, partner at BUDS Consulting and active angel investor.
SASH reporting is like weather station for company’s business – it gives visual and informative information regarding company’s condition and performance and also provides company with insight into its cash-flow requirements for next 3 to 6 months.SASH reporting is a service of BUDS Ltd., consulting company specializing in financial, controlling and management consulting with decades of relevant experiences.
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