Are You Focused On Making Money, Or Measuring It?

I’ve been having a lot of fun lately working with some amazingly forward-thinking businesses. All of these businesses have been successful operations before we started working together. But in each case, despite being “successful” by outside measures each of the owners felt they were “missing something”. The all felt they should have a better handle on how to produce the financial results they really wanted from their business.

The problem each of these business owners had is the same one that most business owners face. They were focused on analyzing and forecasting financial results, and then comparing those results to their forecasts. The problem with that is the owners had been seduced into believing that by doing those things they were paying attention to the “financial end” of their business.

But they weren’t focusing where they needed to. They were telling themselves a lie.

A lie because even the best, most accurate, and most rigorous financial budgeting, reporting, and analysis systems don’t do a single thing to help anyone actively create specific financial results.

Money gets made in any business way before it ever gets measured. I’ve said this many times over the years – it’s the activities that create the financial results. And then it’s the financial statements that measure those results.

When focus is changed from measuring financial results (via financial statements and budget comparisons) to identifying the activities that drive those results, and then creating standards for those activities, amazing results can be achieved.

This may seem a little esoteric. But it really isn’t. The fact is that experience and results have demonstrated that a focus on making money (by focusing on the activities that drive financial results) ALWAYS produces better results than focusing on measuring what has already happened.

So ask yourself if you are focused on making money, or are you merely measuring financial results after the fact, when it’s too late to do anything about them.

And if your focus isn’t where it needs to be, promise you will take the necessary steps to change it. You will be astonished by the results that your business will generate almost instantly.