Consistency

Every morning at 6:30 a car drives past our house. In that car is a very happy dog. You can hear the faint barking of a dog in the distance. As it grows nearer, the barking gets louder. When it passes the house, the barking grows faint once again.

Every. Morning.

There are at least two lessons we can learn from this simple daily occurrence.

First, I want to be as happy as that dog every morning! We can all choose to start each day with that level of enthusiasm. Dogs are so awesome in their ability to love every minute of every day with their whole heart.

The second lesson goes a bit deeper. Consistency. I find that if a day goes by without hearing my barking friend, I worry about him. I miss him. I have come to count on his daily salutations.

In business, and in life, we rely on a certain level of consistency, especially in our business finances. You should be able to look at three months on your Income Statement (P&L) and see consistency in practically every account. The rent doesn’t change, the insurance doesn’t change, recurring revenue doesn’t change, and your margins should also not change.

When managing your business, if you remove the dollars and only look at percentages, how much fluctuation do you see from one month to the next? Why is there a difference?

You need consistency in your numbers (or a good explanation) to make management decisions. When selling your business, the very first thing a buyer will notice about your financials is the consistency, or lack thereof, in your books. They will ask, and so should you.