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A 5-STEP MEETING FRAMEWORK TO MAKING BETTER FINANCIAL DECISIONS
A 5-STEP MEETING FRAMEWORK TO MAKING BETTER FINANCIAL DECISIONSread on smbfinanceos.com This is a sexy topic today, y'all. Meetings. Lovely, lovely, meetings. We don't like them, but done right they can change your business. This 5-part framework ensures your financial meetings are productive & ACTIONABLE. If you were forwarded this email, my goal is to share one thing each week that changes the way you think about money. Subscribe by clicking here.
Want to advertise to 40,000 small business owners and leaders? Go here. A 5-STEP MEETING FRAMEWORK TO MAKING BETTER FINANCIAL DECISIONSThe very first financial meeting I had leading the finance at a small business, I walked into the room, whipped out the financial report, and dove right in. Looking back, I cringe at how bad that meeting was. It was boring. There is no way around it. It was a robotic walk through a financial statement where neither me nor the other leaders had half an idea what I was saying half the time. I was droning to sound smart… they were nodding to not look dumb. When I got done walking through it, there was silence. What was next? It would have been easy for things to end there, but thankfully the CEO knew the business to “know” this stuff without the financials. So he started asking questions. Through that, we got to a good spot, but not without a lot of effort. His questions forced me to better understand the numbers and we got to where we inherently knew the levers to pull. The best meetings don’t just go over the numbers, but instead challenge you to wrestle with them. They help you see what’s changing in your business, discuss what needs attention, and most importantly, make better financial decisions. But that doesn’t happen by accident—it happens when you go into a meeting with a plan. So today, we’re going to walk through a 5-step meeting structure that ensures you get more out of your financial review meetings. Instead of just reporting on the past, you’ll learn how to connect numbers to action. By the end of this, you’ll have a repeatable framework to get clarity, find risks, spot opportunities, and create a plan that actually gets followed. Because at the end of the day, financial reports don’t move the needle. Decisions do. THE BIG PICTURE (5 MINUTES)It’s too easy to just jump in and get in the weeds. But we need to start big picture and make sure everyone understands where the business stands.
Example: “Revenue was strong this month, but we saw a dip in cash flow due to slow collections. We’ll dig into this in the reports to see what’s happening.” REVIEW KEY METRICS (5-10 MINUTES)You’ve already set the stage, so now it’s time to get into your key metrics. These metrics should have already been identified by you and consistent meeting to meeting. Ultimately, most of these will tie to your strategic objectives, as well. This should be a one-page dashboard that could ideally be viewed on a regular basis by the leaders. We want to limit the number of metrics, Common metrics you’ll find will include:
When we look at this dashboard, we want to get a general sense of the health of the business. If this was the only report leadership got, this report should provide enough context that they could make decisions on it alone. During this discussion, answer:
Example: “Our gross margins are down 3%. We’ll talk about this more in-depth later, but we need to understand if it’s pricing, cost increases, or efficiency issues. Does anyone have any immediate insights?” FINANCIAL DEEP DIVE (20-25 MINUTES)Now that we’ve got the summary, it’s time to dig in. You should have your traditional financial reports (Income Statement, Balance Sheet, & Statement of Cash Flows) as well as supplemental reporting that provides important supporting info to the business. Supporting reports will be specific to your business, but some examples would look like:
“The work” on both the financials and supporting reports should have already been done. Someone should be in charge of presenting these and bring their own analysis to the meeting but also leave space for questions from all who are there. We’re so afraid of silence, it’s easy to speed run through these, but make sure you give the group time to offer their thoughts and questions. Ideally, you’ve provided these reports to them before the meeting, so they’ve already had a bit of time to digest, but sometimes that doesn’t happen. We want to walk down each report and ask pointed questions, seek those answers, and start brainstorming solutions. INCOME STATMENT (P&L)
Example: “Gross margin dropped 3%. Does anyone have insights into what caused this? I saw it looked like some supplier contracts renewed and their cost went up. Anything else?” BALANCE SHEET
Example: “Receivables are climbing. Have you reached out to Client A? Let’s schedule some time to go through this report and come up with a plan. We don’t want cash flow issues to creep up on us.” FORECASTING & "WHAT'S NEXT" (20-25 MINUTES)Now that we’ve gone through the reports, it is time to shift our focus from what just happened to what will happen next. We take 3 inputs:
to come up with a “guess” for what will happen next. We want to focus in four spots:
We want to be sure we encourage forward-looking thinking so we can know what adjustments we need to make now and what unknowns we need to look for in the future. Example: “Based on current sales trends, we may have a cash shortfall in Q2. Should we delay hiring or push for faster collections?” ACTION PLANNING & ACCOUNTABILITY (10-15 MINUTES)This is where it all comes together. Throughout the meeting, you’ve been having conversations and tabling others for later. Now is the time to plan what happens after the meeting. Without clear next steps, it’s often like the meeting never happened. Next week we’re going to dig deep into some strategies to help you with decision making as it relates to your numbers, but for now, let’s just talk about the structure of this section. We need to answer:
Without this, the meeting will fade into the distance and be forgotten about. And then those bad outcomes you discussed? They become a lot more likely. Next week we’re going to talk about some decision-making tools around your numbers that’ll help you know when and how to act. But for now, that’s it. We’ve set this meeting to be 60-75 minutes. If you I were you, I’d schedule an hour and a half. You may think that’s a lot, but done right it’s just enough. If you find you’re not using that time, feel free to shrink it to 60 minutes. Just imagine: what if you spend 60-90 minutes each month looking at your financials, reviewing your goals, and refining your plan based on the results? What is possible? Your competitors likely aren’t doing this. Over the course of years, you’re gaining a level of understanding about your business that very few will have of theirs. How big of a competitive advantage is this? Thanks for reading–see you next week, Work with meNeed more than this newsletter? You may not know, I have other ways we can work together. Check them out:
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