A little while back, I was on a plane reading a book. We had just pulled away from the gate and started to taxi out to our runway. It felt like we were taxiing slowly, but when I looked out the window we weren't moving at all. You may have had this same sensation in a car or a train. It's called "Vection". Vection is the sensation of movement produced purely by visual stimulation. Our mind is perceiving something that isn't really happening. Fake news produced by our own brains.
Is it possible that we run our business based on similar fake news? What are some of the things in our business that trick us to believe everything is going well?
Good cash balances
Profitable Income Statements
Good looking Balance Sheets
It's typical for most businesses to look at Cash, Income Statements, and Balance Sheets as indicators in to how well it's doing. You should be looking at that information on a monthly basis. But what's missing? How well is your sales and marketing performing? Are any of your clients moving on? Are all your employees working effectively and efficiently? Whatever you produce; are you doing it well? Is the market you serve changing?
Some companies look at their bank accounts and make big decisions using only that information. When a company is small it's a little easier to make big decisions based on cash balances. As the company grows, so do its complexities. If your business has grown and it has become more complex, look beyond your financial statements and today's bank balance.
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