Build your planning on fact not fiction
The problem with guesstimates in business is that they can create unrealistic expectations, send out false signals and adversely affect other decisions that you make. In some instances, the only thing that you can do is to make an educated judgement, but there is a whole range of software available to business owners today which can make reality stand out over guesswork. When it comes to your business numbers, in particular, there really is no excuse for relying on guestimates in today’s digital age. All the facts are readily available in real-time.
Only ‘perfect’ planning makes perfect
We all accept, in principle at least, that intelligent planning is fundamental to success in every area of life. Sports teams win when their planning is perfectly executed, holidays go without a hitch when the planning has been immaculate, and businesses prosper if the five-year plan has been broken down into yearly, monthly and daily achievable steps. Planning (even more so that practice) truly does make perfect.
But what happens when the plans you make are based on fiction over fact. You can have the perfect plan and apply all of the right actions to fulfil its processes, but if the data it is based on is unreliable – IT WILL FAIL!
History doesn’t always repeat itself, so planning your next move on historic data is crazy. You need to know your position now, before planning your next steps. You need regular reviews– again with current data and adjust your plan accordingly.
An analogy which I think sums this up perfectly is “If you think that you can plan based on what happened in the past then try driving your car home tonight in reverse! You see there’s a reason that the front windscreen is bigger than the one at the back!”
Planning starts at Xero
You cannot build a house upon an imaginary foundation, set up a zoo without animals or safely jump at of a plane without a parachute. Simply wanting something to be true is not the same as seeing the evidence and being certain of the facts. It is the same with financial planning in your business. You need to be able to access the foundation data that will bring your business to life and give you a safe landing.
We advise all of our customers to start their planning at Xero – the best (in our humble opinion) online accounting software in the world for small to medium businesses. With its ability to give you real-time data about your sales, taxes, costs, profits, earnings and literally every other important number in your business, you are no longer planning blindly. You can see exactly where you are today, and it will allow you to plan for where you want to be tomorrow.
Don’t start counting at an imaginary, made-up, guesstimate, finger-in-the-air, wishing-on-a-prayer number. Start at Xero and count on the facts. That is the only way to be sure that your plans will succeed.
If you would like to know more about Xero, knowing your business numbers and successful business planning – please get in touch.