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.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.