Quarterly Numbers

As private companies, we are not obliged to publish any quarterly financials. But imagine if we did think of our business with quarterly targets, and published a report and financials (for internal circulation only) — just like the public companies do? I think it will help small, private companies got a better handle on their own business — and in some ways, even prepare them for the day they become public (if they do).

For most of my life as an entrepreneur, I have not really bothered about targets and all that. “Do the best” was the mantra. Over the past year, I have started tracking all key numbers of our business on a monthly basis more closely (since it is my money that we are currently burning)! We also do a quarterly Board review for a couple of external people – so we at least see the business once from someone else’s eyes. This quarter, I also prepared a brief report which reviewed the quarter that had just gotten over, and provided an outlook for the coming quarter.

This exercise was quite a useful one — it helped look back at what had happened, and put into perspective what we need to do. While there are daily battles to be fought, a bit of big picture  thinking is also critical – and based around the numbers that matter in the business.

So, my advice to entrepreneurs is (and I wish someone had given this to me a decade ago):

  • think of the business in quarters: it is the right granularity — a month is too short, and a year is too long
  • put together a 2-3 member Board with whom you can review the business once a quarter
  • prepare a quarterly report just like a publicly listed company does (and share it with the Board and senior management internally)

The challenge inherent in new, early-stage blue ocean businesses is that one has no clue how the numbers will come up against projections or targets. But, the exercise will still be a useful one and creates much-needed discipline of tracking numbers.

4 thoughts on “Quarterly Numbers

  1. Well Rajesh.
    Theoretically, I beleive each and every word in this post is absolutely correct. But there are some who defy this and try to make some quick bucks. And sometime it works as well
    I’m sure you must have heard about blogertize.in – an Indian startup in news lately.
    If not, have a look at this digg story
    I mean this guy earned $27,000 in 3 months and is expected to make a six digit figure in next 3-4 months and I personally am not very impressed with the business model but other people are and so I say that yes, the content of the post may look like content from a book of entreprenership but in practical world, if luck is on your side some unconventional ventures do help make some fast money


  2. I like this idea. And this is really what most VCs do with their companies. Many times they do it monthly. But the idea remains the same.

    For an entrepreneur without external pressure to do this, they really require self-discipline for this.

  3. You can predict anything… but the future. Many projections of start ups are based on nothing but dreams, and while dreams are good – they may not be a reliable base for statistical analysis. Your concepts of reviewing your financials every quarter has merit, but when a company is very young and cash is hard to come by, review of where the money just goes out, and where it increases and comes back, should be studied monthly, or whenever a particular campaign is completed and the results are received.

    I have lots of free articles on my site for entrepreneurs and start ups. Hope you enjoy them and find them of great value. Jeff Dobkin danielleadams.com

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