Imagine you’re standing on the deck of a giant ship sailing across the ocean. You’re surrounded by water as far as you can see in every direction. There are no landmarks, so you have no idea where the ship is or where it’s going. It could be going in circles for all you know.
Suddenly, a storm comes up. Now all you can see is dark clouds and angry waves. You have even less of an idea of where you are. But the person steering the boat knows. He isn’t worried about getting lost or not being able to find his destination. How is that? That’s because he is using navigation techniques, that tell him where the ship is and where it is going at all times.
Now, picture your business as that ship tossing on the ocean. Is it lost in a storm of troubles? Too many expenses, not enough customers, never enough hours in the day to get it all done? Or maybe the waters are smooth? Business is good and you feel like everything is successful. But even then, how do you know your business will arrive at the destination you have planned for it?
Oh wait. Do you even have a destination planned for your business? Or do you just have a vague idea that someday you’d like to retire?
To achieve a particular goal with your business:
- Replace your full time income
- Generate enough passive income to retire
- Build a legacy to leave to your children
You have to work toward it. And that means you need to learn how to steer your business.
A captain’s navigation system tells him exactly where he is at all times. So, he knows his ship is not in danger. It also tells him which direction the ship is heading and how fast it is moving, so he is able to steer away from trouble. He knows exactly where he is going, so he can plot his route. And, even if a storm blows him off course, he can still find his way.
Can you say the same of your business? Are you using navigation tools to steer your business away from danger and toward your goals? Or are you just a passenger along for the ride?
Where are you now?
One of the biggest parts of navigation is figuring out where you are right now. That ship’s captain isn’t worried about getting lost in the storm. He’s confident because he knows exactly where the ship is. And where it isn’t. He knows that it isn’t about to crash into rocks because they are over there and he’s over here.
Your bookkeeping system can do the same thing for your business. At any moment, it can tell you how much money you’ve made, how much you’ve spent, and if you are seeing the results from your efforts that you should expect. By knowing where your business is at all times, you can feel confident that it is safe and far away from danger.
Once you have a way to know where you are at, you’ll be able to check in on a regular basis. Most business owners look at their financials at least monthly. Then, just like that captain plots his ship’s movements on a naval chart, you’ll be able to track how your business moves over time.
Are you going the right way?
A captain knows how to steer his ship. He knows how his actions will affect its movement. At his will, it will speed up, slow down, turn toward his destination, or move away from danger.
You can do the same thing with your business. Your bookkeeping gives you immediate feedback on how your actions affect your business. Over time that will teach you how to steer it. You’ll be able to speed it up or slow it down, or to turn left or right as you want to. Instead of your business doing the steering, you’ll be in charge.
This is so important because there are hazards out there that you want to avoid. And if you aren’t keeping track of where your business is going, you won’t see them until after you’ve crashed into them.
For example, let’s say that the income from your business drops by 10%. How long until you notice? More than a month or two? By then whatever happened might have gotten bigger. Or worse, you’ll be so low on money that even if you solve the problem you won’t be able to catch up, much less get ahead. Keeping your bookkeeping up to date, will help you spot hazards before it’s too late.
Also, if you aren’t steering your business, how can you hope to reach your destination? A captain has specific GPS coordinates for where he is going. And, you’ll want to be almost as specific for your business.
Where are you going?
The ship’s captain doesn’t get worried when sailing through a storm because he knows exactly where he is going. He is looking further ahead than the next step. And because of that, even if he gets blown off course, he can still find his way to his intended goal.
If you have no particular destination in mind, you might get somewhere. And, I guess you might even happen to be wildly successful. But, if you want peace of mind that you are doing the best you can, you have to work toward specific goals.
The real trick with goals is to define them as well as you can. It’s a lot easier to hit a target that is very specific. The ship’s captain doesn’t aim for ‘the east’ or even ‘somewhere near New York City’. No, he aims for a very particular set of coordinates. And, he has plans for how to reach them even if things go wrong along the way.
In the same way, you should have very specific goals for your business. Then, you can know exactly where you’re going and how to get there. The more specific you can be with your business’s goals the better. S.M.A.R.T. goals are great for that. That stands for:
Specific – What EXACTLY are you going to do?
Measurable – How will you know if you are succeeding or not?
Achievable – Why do you think you can do it?
Relevant – Why do you want to do it?
Timed – When will you do it by?
Goals that specifically address each of these areas will help drive your business forward. And even if you don’t end up reaching those goals, you’ll make more progress by working toward them than if you had drifted along without steering at all.
Arriving at your destination
Bookkeeping is the system that allows you to steer your business in the direction you want to go. If you don’t use it, your business might still succeed. I’m not going to say that it isn’t possible to dumb luck your way into success. But, you’ll never be the one steering the boat.
By setting goals, and tracking your income and expenses, you can know at any time where your business is at. And, the numbers will let you know if you are on track to reach those goals.
And, of course, once you do reach those goals, it’ll be time to start working on some new ones.
When your business is still small, it’s easy to do the navigation yourself. You don’t need anything more specialized than a spreadsheet in the beginning. But, eventually you’re going to realize that there’s a reason why bigger ships have a specialist to help the captain with navigation. A navigator, if you will. And when you’re ready to hire a professional navigator for your business, I’ll be happy to help you out.
If you’re ready now for some help navigating your business to success, let’s schedule a free consultation. I want to help you steer your business toward your goals.