Business resolve

New Year’s resolutions. Such a vain effort for most of us; a total waste of time demonstrated every year at any fitness center. Each January there is a huge influx of potential heart attack victims and pre-diabetes candidates so that hardly anybody can access the treadmill or weight machines without a 30-minute wait.

In February the wait for the treadmill is over but the fitness center is still crowded. By the end of March all is back to normal with only a small minority of the new members continuing to achieve fitness. We continue this annual ritual of New Year’s resolutions because we are such optimists, unrealistic optimists.

But sometimes these commitments, these self-promises take hold and important changes are realized. This is why I still look at my life each year and continue to make New Year’s resolutions, because when these resolutions are acted upon with consistency, good things happen. Here are my New Year’s resolutions for 2012. You might want to join with me in making the same New Year’s resolutions.

In 2012, I have resolved to ask myself the question “What needs to be done?” Peter Drucker, one of the great thinkers in management, wrote in a June 2004 Harvard Business Review article titled What Makes an Effective Executive that all effective executives followed the same eight practices. The first practice is to ask what needs to be done. Here’s an excerpt: “The first practice is to ask what needs to be done. Note that the question is not ‘What do I want to do?’ Asking what has to be done, and taking the question seriously, is crucial for management success. Failure to ask this question will render even that ablest executive ineffectual.”

Later in the article Drucker writes, “Hence, after asking what needs to be done, the effective executive sets priorities and sticks to them.”

Common sense, right? Nothing new here, but how many small business owners or people in leadership actually focus on the important rather than give in to the urgent? There are seven more practices that effective executives use so read the article.

In 2012, I have resolved to practice what I preach. I am resolved to manage my business by the numbers. When you commit to managing by the numbers you have to focus not only on the numbers, but what they mean, the stories they tell. The numbers you use to manage should be more than your Quickbooks Profit or Loss Report. You should study your balance sheet and statement of cash flows too.

Additionally, each business should develop their own key performance indicators to manage and increase their probability of success and profitability. A good book to read to learn how to understand your financial statements is Managing by the Numbers, by Kremer, Rizutto, and Case.

Finally, in 2012, I have resolved to become a genius. I may be engaging in a bit of unrealistic optimism, however, Thomas Edison did say, “Genius is one percent inspiration and 99 percent perspiration.”

In 2012 I have resolved to work hard to find avenues to make my business more valuable to my clients, my team, and myself. In an economy challenged to find growth, I am resolved to grow my business. In an economy with limited resources, I am resolved to be more resourceful. We live in the Land of Opportunity. I am resolved to find more opportunities to prosper and make our community a great place to live.

One more Thomas Edison quote: “Opportunity is missed by most people because it is dressed in overalls and looks like work.” Think about it.

Have a great 2012. I am.

About Potts
David Potts is a certified public accountant also accredited in business valuation. Owner of Potts & Company, Certified Public Accountants for more than 25 years, his practice focuses on small and medium size businesses and their owners in the areas of taxation, accounting and bookkeeping, business valuation and business advisory services. He is a Fort Smith native and a graduate of the University of Arkansas. You can follow more of his thoughts at ThePottsReport.com. Although every effort is made to provide you accurate and timely tax information, it is general in nature and not specific to your facts and circumstances. Consult a qualified tax professional to discuss your particular case.

Also, feel free to e-mail topic suggestions or questions to [email protected]