Are Your Business Visions on Track?

You’ve started a new business and have very ambitious visions of how you want things to work. But, just as you thought things were going great, the resources you need to survive and grow are starting to dry up. This can cause that ambitious vision of yours to cloud up as your resources decrease more and more over time.

Suddenly, you find yourself trying to cut corners and budgeting what resources you still have, while devoting more of your time trying to attract extra cash-flow into the business. So, how are you going to decide where to spend your limited resources?

There is a solution that may just work and get you back on track. You can build a “startup dashboard” that will track your cash-flow. Invest in a good accounting software program to help you set up your dashboard and track your metrics. This will allow you to track the progress of your current and projected cash-flow as well as customer acquisitions, hiring, investment prospects, and product development. You could set your dashboard up to flash different colors to make you aware when there's an issue somewhere. Here are 5 key point you'll want to include in your dashboard.

* Product-development. This tracker will let you know if you are on the right schedule for building the correct products. It will detail the timeline for the products and whether or not you are meeting important targets. If you’re not meeting your goals, it will give you feedback telling you what the problem is and what your customers are saying about your products.

The product-development tracker will flash green when you're ahead of schedule and customers are giving useful feedback on your product. However, when you are falling behind schedule and not getting customer feedback on the product, this could mean trouble. At this time you should investigate what the problem is and make any necessary changes.

* Raising capital. This will show you how well you’re doing in obtaining funding for your business by measuring your cash flow goals. It also measures the cash received from sources that include customers, suppliers, friends and family, and investors.

You should always keep in touch with your stakeholders about investing and collect plenty of cash so that you are in good shape. If your stakeholders are not interested in writing you a check when needed, then you may need to devote a lot more time building up these relationships.

* Cash-burn rates. The cash-burn rate gives feedback that pertains to how long you have before you run out of cash. It will give you details on available cash, list the largest bills you must pay, as well as their due dates. You are in good shape if you have one year’s cash in the till. If you only have 3 months before you run out of cash then you should probably start to worry.

You have a cash crisis on your hands if you have less than 3 months in cash flow. When your cash is this low you will have some serious decisions to make. You need a serious financial infusion at this time and you may also have to consider a huge lay-off or even shut down.

* Hiring activity. Are you building an A-team for you investors? This should detail the industry superstars you’ve already hired, those you’ve interviewed, and those to whom you have made job offers.

* Customer growth chart. Create a chart to monitor your customer growth rate in both number and revenue spent, the products purchased, and in what quantity. This will show you what products need to be increased or decreased in production.

Start building your dashboard today. At Summit CPA we offer multiple resources to get your business on the right track. Contact our office at (866) 497-9761 to schedule an appointment with our advisors.