In the last few Financial Friday blogs, I focused on which reports that you have the technological ability to produce and are useful in managing profitability in your business. This week, I will focus on a simple process that, if you repeat it monthly, will make you much more efficient and successful at improving your profitability and the general health of your business.
To review a process suggested in an earlier Financial Friday, leverage the experience of your bookkeeper. The bookkeeper's month-end work is often considered complete when the financial statements and the practice management program reports are generated. At that point in the process, the most valuable part of the bookkeeper's month-end work has yet to be done. My suggestion is to ask your bookkeeper to spend an hour studying the completed reports, looking for things that “just don’t look right”. The task isn’t to understand why, yet. The task is for the bookkeeper to prepare an ‘exceptions report’ that tells you where your most experienced person, in looking at your business financials, sees potential problems. Your job is to meet with your bookkeeper to review the exceptions report and discuss what might explain each exception. This exercise, done monthly, will familiarize you with your own business and start you down the path of improving your management skills.
The second suggestion I have for you is to develop a ‘business buddy’ relationship. I saw the value of business buddy relationship first hand after speaking at an Equine Business Management Strategies meeting. Dr Magnus asked everyone at the meeting to pick a business buddy with whom they should communicate on a regular schedule to discuss their businesses. As fate would have it, there were an odd number of people in the room so I joined in to have a business buddy, Dr Mike Pownall. Although our businesses were very different, Dr Pownall and I spoke by phone on a biweekly schedule for the better part of a year. We developed a co-mentoring relationship in which we talked through the challenges we were each facing. Those conversations were remarkably helpful. We still have those conversations on a quarterly basis. Now that you know what a business buddy is, my suggestion is that you find one! It may be a classmate, an advisor, a business partner or someone with a business similar to yours. Since money is the second most intimate subject we ever discuss, setting up the business buddy relationship must be done carefully.
With the exceptions report in hand, contact your business buddy, who of course, has her exceptions report in hand. Now you have Business Rounds, just like hospital rounds. Your ismypracticehealthy.com data dashboard will be remarkably helpful.
The business buddy discussions will yield high impact results that will enable both of you to improve the profitability of your business as well as improving the culture and strategy, critical pieces of business success.
Business rounds, give them a try!