Tuesday, June 12, 2007

Your company's narrative

What is the story of your company? Okay - I am not really interested in your history: tell that to your mum!

So what is the story to be for this new year? Aha - you are going to expand. And hire a new sales guy and do some PR. Uhuh. Well that is wonderful. But do you know what are you really actually going to do, and when, and how much it will cost and what effect will that have? How will it all look to the bank manager who only sees the numbers and the accountant who'll give you that quizzical look when you review the first quarter together.

Write down your company's narrative for next year. There is a truly effective and productive way to do this. This narrative form is otherwise known as a cash flow projection. Do it month-by-month, or week-by-week, whatever works best for your situation. Doing this will force you to decide exactly when you are going to hire that sales guy, how much you are going to pay her, when her work will start paying off, when the revenue will come in. Doing this will put flesh on the future, making it seem real and helping you understand it better.

Once you have this narrative you can constantly monitor it against what actually happens. It is a terrific template for you to work against - when things change you can just adjust your narrative as necessary. It is not for the lazy, but then neither is running a successful business.

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