Follow Robert Linkedin Facebook
Email Robert Email
Financial
Dec 1, 2014

Are You Planning Long-Term For Your Business?

Sponsored Content provided by Robert Rickert - Founder/President, Robert J. Rickert, CPA, PC

As a small business owner myself, I realize how tough it can be to spend time working on the long-term planning required for long-term success. Most of us spend much of our day putting out short-term fires, like employee issues, customer requests, vendor disputes and more. Planning seems like one of those things that we get to when we get to. And often, we don’t.

But it’s not just the short-term distractions that can keep us from planning properly. It’s also the very nature of business reporting. Unless you are more sophisticated than most, the most extensive planning you’ve done is putting together next year’s budget. And that is usually done in December of the previous year, so you may have a 13-month plan, at best. In terms of results, most likely the best you have is an income statement that measures monthly/quarterly/yearly profit. Your scorecard is the bottom line on your income statement and the cash in your bank account.

When these are the only means you have to keep score, your mindset naturally becomes one of trying to maximize short-term profit and cash. When meeting with a new prospect and discussing strategy, one question I often get is “Can you show me where to cut costs?” This is natural, because cutting costs will help increase your short-term profit and your short-term cash. Obviously those are good things, but are you doing it at the expense of long-term goals? And by long term, I mean projects that will take five to 10 years to pay off. Things such as new offerings, new territories, entirely new markets. As a business owner, you can’t trip over pennies on your way to dollars. I can’t remember who said that first, but the quote is one that holds true for all of us.

So why is a CPA talking about strategy and long-term goals? Let’s face it, accountants don’t have a reputation for being great strategic thinkers. We’re the bean counters that bug you for a receipt to document your business meal, not the consultants who help you craft a five-year strategic plan. And we have no one to blame but ourselves for this image.

However, we as accountants are in a unique position to help business owners develop strategies to grow and prosper. Consider this observation from Clayton M. Christensen and Derek van Bever from a recent article in the Harvard Business Review:

“Finance is taught independently in most business schools. Strategy is taught independently, too – as if strategy could be conceived and implemented without finance. The reality is that finance will eat strategy for breakfast any day – financial logic will overwhelm strategic imperatives – unless we can develop approaches and models that allow each discipline to bring its best attributes to cooperative investment decision making.”

I was struck by this assertion right away, because what the authors are describing is the crux of what we do for the business owners we work with. Unless a business owner is actively working to align a company’s financial and strategic initiatives, the financial pressures of today will always outweigh strategic desires. Achieving alignment starts with understanding where you are financially and then figuring out where you are trying to go. Obviously, your accounting department should be in charge of this effort by providing accurate and timely financial statements, budget-to-actual comparisons, sales reports, employee scorecards, et cetera. Once you have that, a strategy can be developed to accomplish your goals, and your CFO should play a major role in developing and executing that strategy.

Of course, some businesses don’t have the people or resources to tackle strategic planning because they lack a designated CFO or a deep accounting department. Or they might want the advice, insight and observations that an outsider can bring. We enjoy the challenge of helping small businesses look beyond the day-to-day so that they can plan for the long-term. If you’re ready to start the process, give us a call. We’d love to help.

Robert J. Rickert CPA, PC provides consulting, accounting and planning services. They manage accounting and finance departments for businesses from $1-$50 million in revenue to provide increased cash flow, more profit, and strategies for long-term growth. For more information, visit rickertcpa.com, call 910-319-9127 or email [email protected].

Rickert insight 14oct
Ico insights

INSIGHTS

SPONSORS' CONTENT
Dave sweyer 300 x 300

Your Guide To Hiring The Right Professional Property Management Company

Dave Sweyer - Sweyer Property Management
Michaelhiggins 41019104338

Dignity Memorial Expands Offerings

Michael Higgins - Dignity Memorial
Alycephillipsnew2

Trustees Can Face Tricky Technical And Personal Challenges

Alyce Phillips - Old North State Trust LLC

Trending News

Businesses File To Be Essential Amid State Stay-at-home Order

Christina Haley O'Neal - Apr 6, 2020

Grant Program Launched To Help Downtown Wilmington Businesses

Cece Nunn - Apr 6, 2020

PPE Donors Include Dentist, Film Industry

Cece Nunn - Apr 7, 2020

OPINION: Update Pay Loan Rules To Address Restaurants

Jud Watkins - Apr 7, 2020

BIZTALK: Banking On Crisis Loan Programs

Staff Reports - Apr 6, 2020

In The Current Issue

Regional Rift

To the federal government 20 years ago, the Wilmington area truly was the tri-county region. But in 2013 that changed....


Area Attorneys Chosen For 2020 Super Lawyers List

Another legal industry accolade that comes out each year is the Super Lawyers list, which is a publication of Thomson Reuters....


On The Home Office Front

No matter how you cut it, say it – or even punctuate it – hundreds of thousands, if not millions, of Amer­icans are doing it because of the...

Book On Business

The 2020 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2019 Health Care Heroes
August 26, 2019 Power Breakfast: A Healthy Sale?
2019 WILMA Leadership Accelerator
2019 WilmingtonBiz Expo Keynote Lunch - CEO, nCino, Pierre Naude`