Every business owner understands the power of setting goals. They’re a motivational tool that provides direction and they help you measure progress along the way.
But did you know there’s a science to setting goals to more effectively achieve your desired result?
In this post, we’ll explain why prescriptive analytics is the key to making better decisions and getting the results you’re looking for.
Identifying and categorizing your goals
Before any decision-making process can be set into motion, you just first identify your goals and categorize them according to priority.
- Immediate and measurable goals are set for the short-term
- Proactive goals are for knowing what is coming
- Strategic goals aim to design a future of your choosing
Defining business goals and their priority is the first step for clients entering into Accountability Services’ Concierge MasterPlan™ program. It’s how we set the stage for our collaboration and start to think about putting together a strategic plan.
But this is just the beginning.
Taking a data-driven approach
Once we understand your primary business goals and the key results you are hoping to achieve, the next step in our process is to put our advisory team to work doing a deeper dive, to uncover the numbers that lead to better decision making.
When we talk about Financial Planning & Analysis (FP&A), this is what we’re referring to, the process of finding, organizing and leveraging data to determine which course of action will better achieve your desired result.
There are three types of data analytics used by businesses to guide decision making:
- Descriptive analytics looks at what has already happened
- Predictive analytics show us what could happen
- Prescriptive analytics inform us on what should happen
Our FP&A process takes a prescriptive approach for better control over the future of your business. Here’s how it works.
Prescriptive analytics answers the question, “What do we need to do to achieve this?”
The process for achieving a goal usually works something like this. You define the goal, and then write down a bunch of stuff you need to do to get there.
But without data, all your steps and conclusions are based on instinct – basically listening to your gut. Which sometimes works out, and sometimes doesn’t. You won’t find out until later.
What prescriptive FP&A does is add probability-weighted projections to the process, allowing you to see which options are more likely to be successful before you put them into action. FP&A takes the guesswork out of financial decisions – drastically improving outcomes and relieving decision fatigue and stress.
Of course, crunching these numbers takes experience and expertise – which is where we come in.
Analytics are only as good at the inputs
Earlier in this piece we talked about setting goals being the first step in any FP&A collaboration, and the word collaboration really is key here.
Client participation is critical for the Concierge MasterPlan™ to work. This is a partnership, and the more you put into it, the more you get out of it.
To run analytics that matter, we need your input – and as things change, we need you to communicate these changes so we can adjust.
Overview of the process
During your initial “Launchpad” meeting, we sit down to make sure we understand your goals. Then, we work together to identify and categorize all the key actions that need to take place, along with how each goal will be measured and results communicated.
From there, we set up a regular cadence for goal setting, prioritizing, data gathering, communication, and ultimately, results.
Don’t forget your most important goal
Business growth is not the only objective FP&A helps you to achieve. At some point, every business owner must plan for an exit. Financial Planning & Analytics helps ensure your exit goes exactly how you want it to.
Whether your vision is a merger, sale or family succession, making better decisions every day between now and your exit date is the secret to getting the payday you’ve worked your life to achieve.
