How the Four Pillars of Financial Success Bring Peace

As a business leader, do you ever get stressed out over money? If so, you are not alone.

In a previous post, I discussed the four pillars of financial success. In this post, I want to make it more personal – to show you how knowing and practicing these pillars can reduce your stress as a leader. Let’s review the pillars and consider how they help you manage stress.

These pillars are:

1. Understanding: Knowing the basics about typical financial inputs and what the data reveals.

What it is: You need to understand basic financial inputs such as revenue (income generated from your sales), expenses (costs to run the business), profit (what is left after expenses), and cash flow (the movement of money in and out of your business.

How it brings peace: many business owners fly by the seat of their pants and don’t really know whether they are making money. Understanding what your expenses truly are will keep you from spending money you don’t have, and could keep you from incurring debt to keep things afloat.

2. Forecasting: predicting expected results and cash flow.

What it is: Forecasting is a core process to predict your company’s results and financial performance. It’s a view based on historical data, current market trends, and expected future events. It provides insights to make informed decisions.

How it brings peace: when you understand your company’s performance trends, you can plan better for slow and bumpy periods. You can help your team work together in the leaner times and celebrate in the more fruitful seasons. You won’t be going into each new week blind.

3 Analyzing: using a weekly dashboard to determine where you stand.

What it is: A weekly report provides a more immediate view of your business’s financial health, enabling quick adjustments, centralizing critical financial data, and offering a snapshot of performance and trends.

How it brings peace: Having access to your up-to-date numbers will help you decide whether you can afford that new piece of equipment right now, or must save up for a while. You’ll see if you can make payroll – a definite source of stress if you cannot.

4. Reporting and Reviewing: producing and reviewing monthly CFO reports to stay aligned with your mission and course correct as necessary.

What it is: Financial reporting is critical for businesses of all sizes, providing key insights into financial performance, health, and the decision-making process. Financial transparency is the key to operating a business with integrity.

How it brings peace: It’s important to know if the business is performing and progressing at the correct pace. Are the main financial numbers on track and pointing in the right direction? Knowing where you stand helps you determine if you are indeed on the mission of the business (or your own personal mission). You can sleep better at night knowing your day-to-day financial decisions coincide with those priorities.

I highly encourage you to have practices that align with these pillars. Your stress level doesn’t have to be high over elements of the business you don’t know or understand. I can help. Contact me for a conversation!

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