Part 1: Back To The Future

As a Business Owner, how do you make day-to-day decisions? Do you base your decisions on …

  • Financials?
  • Feelings?
  • Staff Members?
  • Cash?
  • Nothing?

At the end of this blog you will understand why I ask this question. So let’s get talking …

A financial planner is well-schooled at helping their clients think “backward” starting from establishing their retirement goals, and then mapping an investment strategy designed to achieve those targets. Have you considered that a similar exercise would benefit your efforts to build and strengthen your business?  At CLM Advisors, one of our favorite phrases is “thinking with the end in mind.”  This means defining your aims for the business at some future point in time.  For many business owners, that doesn’t necessarily mean “retirement”; it might simply mean “transition.”   

One of the great privileges of working with small-to-medium-sized business owners is understanding and developing the personal aspirations of the Client.  Among the first questions that I ask of a prospective new client is, “where do you want to take this business?”  The answers vary widely, and that’s what makes the work so challenging and rewarding.  No Client is the same as the last one, or the same as the next one.

A responsible Fiscal Management plan is highly contingent on the long-term plan.   With that in mind, we can ensure that the present-day business financial model is set up to provide the results (profit, cash flow, accumulation of equity) that lead to those future goals.  We always encourage, and help business owners develop, a “rolling” two-year financial  projection for the business. Of course, over time the Client’s long-term goals may shift; therefore, the plan should be flexible and dynamic.

In Part II of this blog series, we will look into the creation of a detailed forward-looking financial projection and how we use that projection to inform day-to-day decisions.

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