If you drive a car with an icy front and rear windshield, you will not get far. By defrosting both windshields, all of a sudden you will see everything clearly and in focus, and you will most likely arrive at your destination safely. The same goes for reporting.
Most entrepreneurs have insufficiently developed processes and systems (which work) in order to record everyday activities. When an entrepreneur understands the true nature of business, they at least have a platform to work from and make decisions based on facts, rather than on speculations and sporadic evidence.
Entrepreneurs usually wait too long to implement an adequate reporting system. At whatever point you decide to introduce reporting you will be at a competitive advantage and be given the opportunity of working in a safer environment. Without comprehensive information gathered in the right manner, it is not possible to implement efficient analysis and planning.
Reporting is important for two reasons: to know what we did in the past and, based on past data, to create a vision of the future. Most entrepreneurs have an innate inclination towards optimism – this is naturally an advantage, but can also be a disadvantage. The preparation of overly optimistic evaluations can be very dangerous. Although setting ambitious targets is one of the key factors of success, self-deception always and very quickly results in cash flow problems.
Reporting is simply a procedure of recording all the data relevant for the business and presenting them in different ways, with the aim of efficient analysis and coming to conclusions on the weaknesses and advantages of the company. Setting up a system of reporting seems complicated and difficult, which is the main reason why business owners avoid it. On the other hand, procrastination is dangerous for business in the long run. Have faith. Investment and difficult work while implementing the system will pay off quickly and prevent a number of problems in the future.
Well-designed reporting is the secret weapon of every successful business story. For if you are able to look at your business objectively, piece by piece, and with clearly defined interactions, strengths, and weaknesses, you will achieve the clarity necessary to make the right business choices.