What were your actual revenues last month?
What are your projected revenues for next month?
What were your gross margins for last month?
Where did you make the most money?
When will you be able to afford to hire your next employee?
What are you planning to make in net profit for 2009?

If you can answer all of these questions, you will have a successful business. For those of you rolling your eyes because the financial aspects of your business hold no interest for you, I have two words.

Think again.

Because without understanding the financial aspects of your business you won't exceed your own expectations. In fact, you'll continue to WISH for more profits, more revenue, more clients and they will always be just beyond your reach.

The biggest abusers of this tend to be business owners who get a business started and it takes off. They are successful quickly, revenues start rolling in, orders and business happens without much effort and they become enamored with their own success.

I know of several business owners who have successfully run their businesses for 10+ years. They have never paid any attention to their financials. They leave this critical aspect to their bookkeepers and their CPA's, simply making sure they have money to spend when they need it. In too many cases that bookkeeper is left making decisions that prove detrimental to the business — not paying payroll taxes because income wasn't there and the decision to pay the government took a back seat to paying other bills. This isn't the bookkeeper's problem. It's the business owner's problem.

Not understanding how your money is being spent and how much is coming in means that your business isn't capitalizing upon it's potential. If all a business owner wants is a lifestyle business, great! There are all kinds of reasons people go into business for themselves and I'm not passing judgment. I'm addressing the frustrated business owner who can't seem to grow their business beyond a certain revenue level or profitability level and wonder why.

If you become passionate about the financial aspects of your business, you will always have a business to be passionate about.

Start with a profit plan. This is simply a budget but knowing how much people hate budgeting, I prefer to call it what it is. It's your Plan to be Profitable!

Managing your cash flow is also critical. Cash flow is the timing of when money is coming into your business and when it is leaving your business. It's not the same as revenue.

Select two key indicators that will help you track and monitor when your company is being successful and more importantly, when trouble is rearing its head. If you are tracking the amount of revenue you need every month to stay ahead of your expenditures, when that revenue starts to slide, if you are tracking it you'll start watching expenditures and make adjustments before you get upside down.

Here's a reason that may get the attention of those business owners who just don't want to pay attention to their financials.

A business owner that isn't involved in the financials of their business is at a competitive disadvantage. If your competitors are watching their bottom line, if they know where they make the most money, I will guarantee you they will weather any economic downturn better than you will.

Does that get your attention?

You can blame your lack of sales on the economy. It's an easy target and one most people will understand. But I believe your lack of profitability comes from a lack of focus. Sure the economy is slowing people down. Companies are evaluating more closely how and when to spend money. They should. In fact, the companies that are still going strong are the companies whose focus has been strong. These companies were always focused on their bottom line, kept a close watch on spending and didn't take the attitude if you spend it, it will come. It being profits.

I talk about Profit-Building vs. Profit-Depleting activities and help my clients understand the difference. Because it's very easy, as business owners, to let the Profit-Depleting activities take priority over the Profit-Building activities. Why? Because the Profit-Depleting activities are easier!

Let me ask you. What's easier. Making that follow up call to a potential client or twittering? Organizing your week with appointments and phone calls or checking your web stats? Researching potential markets or answering email? Putting together a sales script and benefit statements for your product or service or meeting your friend for coffee? Deciding where to cut expenditures or putting together a marketing plan? Can you identify the Profit-Building vs Profit-Depleting activities in each of these situations? Hope so! And know that more times than not they aren't as easy to spot as the ones I'm suggesting. That's why they can be so detrimental to the success of your company. They sneak up on us and disguise themselves as Profit-Building when in fact they are Profit-Depleting!

Profit-Depleting activities suck the life out of a company. If you aren't setting goals and expectations daily and putting activities at the top of your list that will drive Profit-Building activities, you are losing money. Too many companies were struggling BEFORE this economic downturn hit. I maintain it's because too many business owners take a wishful approach instead of an intentional approach to the running of their business. And it all starts with understanding the financials.

When a business owner focuses on the financial aspects of their business — when they really understand how to build a profit plan (budget), manage cash flow and track and monitor key indicators, their business will succeed. Business owners who can't take the time or don't want to deal with the financial aspects of their business will struggle. And when the economy adds another challenge, they will more than likely go under.

To maintain a focus on Profit-Building activities, ask yourself this question when you get ready for your day to begin.

What do I have planned today that will keep me focused on Following the Money!

If your list of daily activities doesn't meet the criteria of helping you Follow the Money, I'd put those activities at the bottom of your list or take care of it during non-peak business time.

What will you do today to change your Profit-Depleting activities into Profit-Building activities?

Because I'm a business growth specialist, people ask me how my business is doing because in their minds, businesses aren't growing. With the economic downturn and all the negative news about businesses declaring bankruptcy, closing their doors, laying off employees, losing their customer base — you'd think someone like me would have to change my approach.

Well, I'm not. And here's why.

If you aren't growing, you're dying.

Growth doesn't have to mean an increase in revenues or profits or equity. You don't have to grow in numbers to be a growing enterprise.

I maintain that it's the business owner's responsibility to define growth. Don't let growth define you.

So what does that look like? If you are running a business today and are facing challenges because of this economy, start looking inside your company to impact things you can control.

For instance, are you satisfied with your current vision? Have things changed dramatically enough for you that you need to rethink what your company's vision should be? Holding on to 'what might have been' never worked. Don't be afraid to rethink what your company can be over the next 18 months. Look for areas of competency that you may not have exploited or think ahead of your customers for services or products they don't even know they need yet.

Are you satisfied with your staffing? Are you hanging onto mediocre employees afraid to let them go? Are you wrestling with the challenge of letting them go because they may not find another job? Or are you wrestling with the challenge of letting them go because you aren't sure you can replace them? At a time when you need exceptional employees who bring exceptional skills and attitudes to the table, you simply don't have the luxury of settling for employees who don't perform.

Are you satisfied with your processes? When this economy turns around, and we all know it will, are your processes at a level where you can get traction quickly and take advantage of the opportunities that will be there? If you are assuming your processes are in good shape, do this. Ask your employees. You'll get an honest answer and then if there are problems, get them to solve them. There is no better time than now to put in place the processes and systems you need to grow.

Growth isn't just about getting bigger. Growth should be about getting better.

How are you doing?