Hit your goals faster by tracking your performance

Step One: Plan

Examine your business

Write a one-page plan: 1 hour

Start by thinking through all the important parts of your business. Creating a one-page plan gives you an essential starting point for building a growth-focused forecast. Jot down things like:

• The problems your business solves
• Solutions you provide
• Your target market
• How you’re different than competitors
• Sales and marketing activities

Why this step is important:

Think of a one-page plan as your North Star. It’s a simple overview of your business strategy that you can reference and update as you grow.

Step Two: Forecast

Build a financial compass

Solidify your direction: 2-5 hours

A good financial forecast works like a compass: it shows you which direction to head, no matter what type of challenges you run up against.

Create your forecast based on the starting balances from your accounting data. Then build out your projections line by line:

• Revenue (unit sales, billable hours etc)
• Direct costs (labor, materials etc)
• Assets, dividends and taxes
• Financing

Why this step is important:

Forecasting helps you spot opportunities and potential problems before they happen. For example, you’ll be able to predict if you need more capital to cover upcoming expenses and payroll. Or figure out when to raise prices for certain products or services.

Step Three: Review

Spot growth opportunities

Reflect on your performance: 1-2 hours

This is when the magic happens. Compare your forecast to your actual results every month to spot ways to trim costs and improve profit.

Look for gaps between what you expected to happen and what the numbers actually did. These hint at growth opportunities. For example:

• Did any product lines perform better or worse than others?
• Were any expenses higher or lower than forecasted?
• Did you collect money as planned?
• What does your future cash flow look like?

Drilling into these metrics allows you to make data-driven decisions around pricing, spending, marketing and more.

Why this step is important:

Businesses that continually track against their plan grow 30% faster than those that don’t, according to a study in the Journal of Management Studies.

Step Four: Refine

Make strategic decisions

Apply what you’ve learned: time investment varies

You’ve tracked your numbers. You’ve spotted opportunities. Now, use everything you learned to make intelligent business decisions. This might include:

• Raising or decreasing prices for certain products
• Cutting expenses to improve profit
• Focusing on a different target market

Then go back and update your forecast (and maybe even your plan) to reflect any changes you make.

Why this step is important:

Businesses that successfully execute their strategies generally increase their revenue by 80%-120% in a three year period, according to the Palladium Group Whitepaper “Strategy Execution, A Competency that Creates Competitive Advantage.”