Your financial records aren’t just a set of numbers that indicate your profitability. They’re the story your business is telling you day in and day out.
But so many IT and managed service providers (MSPs) we talk to aren’t getting as much out of their financial stories as they should be. They see the bottom line and maybe spot gaps in ConnectWise, but they can’t grasp what their business is trying to tell them.
You need to understand the financial language to follow the story fully. You need to be able to look at financials in a structured way to really hear the story and to be able to listen to the story often enough as it changes to identify necessary corrective actions.
Sometimes your financial story might seem as difficult as reading War and Peace. But when you cut to the core of your financials, you’ll find the keys to increasing net profitability and bottom-line revenue while freeing up time to make critical decisions about your business.
Business Assessment: The First Page of Your Financial Story
Every business has its flaws. And in spite of any minor issues on the backend of your business, you’ve made it this far. To take your success to another level, you have to dive deep into the different areas of your business and identify any problems (big or small) that could potentially be holding your profitability back.
This assessment phase is the first step for any company to harness its financial story. From all the interactions we’ve had with clients, this stage seems a lot like visiting a doctor. You might visit your doctor to address a single, superficial symptom. After close examination, the doctor could find a more complicated root cause.
This is the same as when you find superficial issues in ConnectWise. You can fix the superficial issues, but we’ve found that the root cause often runs deeper and requires a more thorough assessment.
I can tell you from experience that the Bering McKinley assessment phase runs between three and four hours. These types of assessments involve several questions about your business combined with careful examination of your services, sales, finance, and personnel. With a clear picture of how a business operates, you can take all that data and create a detailed roadmap to put yourself on a path to growth and profitability.
But, here’s the deal: numbers alone are not enough. A roadmap not tied to your numbers will never work. So, using a personalized roadmap is the first step to sorting out your financial story, and roadmap is the action plan for moving forward.
3 Steps for Systematically Growing Your Business
Many owners are too busy acting as managers and ensuring client success to be able to pause, take a step back and assess their financial and operational health. Yes, they read some numbers, Many owners report that they either don’t know what to report on or don’t make it a priority to consistently review those numbers. But you need mastery of your numbers to spot trends, prevent poor decisions and grow. This is our motivation for creating three specific steps (programs) that help MSPs read their financials and spot growth opportunities.
Many industry programs for helping owners grow address numbers in the aggregate but fail to really get into the weeds of how these numbers impact decision making or indicators that would tell you the business is moving into a slow descent of major clients and/or revenue loss. What we’ve learned through the years is that business owners need guidance and accountability to help them overcome the hurdles of business ownership and to amass a higher level of financial IQ to be able to spot trends and understand the impact on profitability.
As you work to get your financial story under control, consider how each of these steps could impact your business.
1. Work with a Business Guide
Everyone needs a coach; even Olympic athletes need a coach. The reality is that a coach is going to be able to guide you through your numbers to help you review, track, and trend financial and operational KPIs. Programs that provided guided learning, alongside the performance of the organization provide you with a path to mastering profitability.
At Bering McKinley, we recognize an owner need for guided business coaching and we fill the gap with a special program called the Compass Program. Every month, we provide a compiled report of an owners financial and operational data from their own QuickBooks and ConnectWise accounts. Month after month, we work with owners to see trend information around key KPIs and gain valuable insights into how the business is really performing. We use this time to review compliance results, positive and negative trends, and corrective action that must be taken to improve performance and profitability.
The Bering McKinley Compass program and programs like them are a way for MSP owners to go deeper into their numbers and understand the “why” behind them. If you’re an organizational leader that wants an industry-leading expert to review your financial story (without the $50,000 per year price tag), The Bering McKinley Compass could help you plot a path to growth.
2. GPS for Quicker Results
So, let’s face it: we often start out on a good path and find ourselves way off course over time. Why? Because the accountability around proven best practices that would have helped us avoid those small and (at the time) seemingly insignificant decisions turn out to cost us time and money in the long run. We spin our wheels doing what others have mastered and learned how to avoid. This is where GPS comes in.
Legendary baseball catcher Yogi Berra said, “If you don’t know where you are going, you will end up someplace else,” and so it is with our business. GPS is the accountability and the best practices learned from experts and peers that provide any owner with a better financial understanding of business growth.
At Bering McKinley, we take it one step further and we blend monthly ConnectWise Manage Audits into the peer team environment to give owners the tangible tools to guide the business. Peer team environments need to cover service related issues around time entry compliance to invoicing compliance, agreement buildout compliance, and sales module review in order to maximize efficiency and impact profitability.
3. Business Destination Planning Now & Not Later
We all went into business for different reasons. Maybe you fell into ownership through marriage, a partnership or simply by accident. Some individuals set out to become owners from the very beginning, but whatever the reason you chose to own your own business, you have to know where you are taking the business.
We believe you will not reach your desired business destination by chance. In fact, figuring out what you want from the business, whether it be a succession to a family member or selling the business down the road, requires planning and preparation now to reach your desired destination.
Some of the steps to begin planning includes:
- Starting with a business assessment. Create a roadmap for reaching your business and financial goals
- Decide what kind of business owner you want to be. Is the business more a lifestyle journey or do you want to be highly profitable in order to get a certain buy-out price? Decide now. Your business ownership “style” will determine what the business is worth down the road.
- Work with a business coach who will analyze every step in every transaction for efficiency and effectiveness. At Bering McKinley, we weave our recommendations into your existing processes and managers are given specific instructions to achieve desired outcomes. Be sure to choose your coach wisely.
Next Steps for Harnessing Your Financial Story
Business owners need to take a close look at what the financials are saying about their operations. But it’s what you do with your observations and insights that really matter.
Your next steps should be to decide what level of assistance you might need to uncover the opportunities hidden within your financial story.
We want to help you start down the path of profitability and growth. Contact us today and let us know which program might be right for you.