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Kindle Notes & Highlights
Find your reporting rhythm and hold your team accountable for report production. It is not the quantity of data, but the right data at the right time that matters. Never take your eye off your cash balance. Project your cash flow over a two-week period so you can plan for shortfalls. Monitor your labor productivity by watching your gross profit and your cost of labor. Use rolling-twelve data to see the macro trends of your business.
Never print a P&L without looking at your balance sheet to make sure there are no glaring errors.
Don’t look at the metrics of other companies; set your own metrics and break your own records.
Try this technique: Every time you’re in a business relationship and think you’re being extra nice, look at a picture of your spouse and your children sitting at a table with no food on it. Then decide how nice you really want to be. It’s business, and while it’s important to be nice, it’s important to develop solid relationships with people who pay their bills.
It’s important to understand that a metric is more about movement than it is about the number itself. If you take a specific metric and compare it to another company, you need to make sure it’s calculated the same way and it means the same thing for your industry. It is more important to set and exceed your own company goals.
You can’t take distributions—except for taxes—until you’ve hit your core capital target.
Your forecast must connect your P&L to your balance sheet. Keep your eye on how your cash lags your profitability.
