Accounting and Finance for Managers
Let’s start with planning:
- Recognize problems and opportunities
- Identify alternatives
- Analyze the alternatives – maybe they are garbage
- Choose and implement the best alternative
Two main types of planning
Depending on size, and the business planning steps will be tailored to your organization.
The first type of planning – Long Term Planning – back in the day, some companies in Japan had 500-year business plans that came crumbling down during Japan’s great recession. Words of wisdom don’t worry about tomorrow for tomorrow has its problems. This is not to be taken out of context and implemented as a carefree, do-nothing attitude. But we should reflect on our long term planning and for our purposes as managers we do a 3-5 year long term plan anything longer and you are silly.
Long term planning includes Strategic Planning and Capital Budgeting
- Products
- Markets
- Facilities
- Financial Resources
Strategic planning
You first need a strategic plan, meaning what are you aiming for? One of my favorite things outside of numbers and business is words. The Word Sin comes from the Greek word hamartia, which means TO MISS THE MARK or even better a forfeiture because you missed the mark. It’s an incredible word with such deep and profound meaning that I will discuss this in another topic and focus solely on this astonishing word. I digress, back to strategic planning.
- You need to identify a mission – or what the heck are you trying to do or accomplish?
- What are your goals from the mission you described above?
- Lastly, Define strategies and action steps you are going to take to achieve these goals.
At the end of the day, you need to shut everything up, turn off the freaking TV, Netflix, and everything else and FOCUS! Most of you are lost in the sauce because you lack focus. The only way you can determine the above is by critical, absolute focus.
Check our part one of this topic here.
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