This morning I was reading an excerpt from “The Compound Effect” by Darrin Hardy and was reminded of the daily habits that we do regardless of whether positive or negative and just how those habits shape your way of life. When I was reading and reflecting, I realized it was like a client I met earlier this week. My client was busy building her business with inventory, daily purchasing and scouting for emerging and unique merchandise, and was compounding plenty of personal debt.
Operating a small business on debt can sometimes quickly and sometimes slowly run you right out of business. I say why don’t we stop and see the effect of what she was compounding through her daily shopping excursions.
It would seem like common sense to many, however to other’s and in this case it was a incredible surprise. This woman business owner retained me as a business consultant to get organized. I’ve learned over the years that when clients need to get organized and I discover their cluttered office space, I know there’s more going on than just getting organized.
As we went through a what I refer to as a needs assessment, I identified that the business was being sustained by her nest egg. This woman had no notion just how much her endeavor was actually costing her, although it kept her really busy. Being busy doesn’t mean being in business.
The action I strongly recommended we undertake was to examine all of her expenses for the year and break them down by the day. We then arrived with an amount that was her daily goal. This exercise isn’t rocket science but I’ve learned it works. I learned this approach during my retail experience.
Each and every single day you would “chad in” and learn from your manager what the daily target was, exactly where were we last year this time, and where are we for the month. when you know these goals, you have a way of measuring and a motivation for the day.
Before you keep squandering money into your business with marketing, new campaigns, even new workers, take the time to stop and take a look at the numbers, understand the bottom line and make strategies in line with the numbers rather than your ego.