Navigating A Business Toward Long Term Success

When navigating, the most important piece of information is knowing where you are. Without this it is difficult to see, let alone solve, problems and move in the right direction.

In business, knowing where you can be determined through your financial statements; the profit and loss statement, the balance sheet and the cash flow statement.

Are you making a profit or a loss? Is cash generation positive or negative? Is the return being generated sufficient?

These questions, and others, inform the proverbial ‘point A’ on the map - where you are now.

The next step is to determine a destination, a goal. Think about time and money…

• What does the business want to achieve and by when? 

• What does the business need to achieve and by when? 

• What should the business achieve and by when?

These questions illustrate the proverbial ‘point B’ on the map.

Now it is a matter of how to move from point A toward point B..? 

What growth is required? What investments are required? How will this be funded? What could be executed in order to make the journey efficient and effective? How to reduce risk? 

The answer to questions such as these inform the future financial landscape: budget, forecast and target. 

• Budget: What do you need? 

• Forecast: Based on the actuals, relative to your assumptions, where do you end up?

• Target: What do you want?

Note: It is possible for Fathom to treat budget, forecast and target synonymously or independently. It just depends on how sophisticated you wish to be. 

Fathom then has the ability to load these future results in so that actual results can be compared against them. This can be done inside company account settings.

As actual results flow in a business can gauge what is working and what is not. Adjustments can be made to correct or adjust course, and move the business toward success. 

Tip - course corrections can be applied to the Fathom forecast easily via scenarios and microforecasts. These tools are a great way to manipulate forecasts without losing track of your changes.