Pay Attention to your Instruments

Weiss Advice Issue: 139, March, 2015

When I was piloting planes (Cessna, WWII naval trainer, B-24 heavy bomber, Goodyear Blimp), all without a pilot’s license, I found that there were a few critical instruments to watch: altimeter, horizon, air speed. Beyond that, just keep looking around you.

In our practices, there are a few key instruments as well. No matter what your expertise is, your business should be guided by evaluating these indices:

  • Revenue growth: Are you doing better this year than last year in both repeat business and new business?
  • Profit: Are your margins improving as you become more efficient and initiate less labor-intensive offerings?
  • Referrals: Are both solicited and unsolicited referrals increasing?
  • Project duration: Are you completing projects in less time?
  • Reserves: Are you fully funding deductible retirement programs and increasing your savings/reserve account balances?
  • Debt: Are you retiring more debt, approaching zero long-term debt, beyond mortgages and car loans?
  • Presence: Are you becoming better known in your area of expertise in terms of being cited, interviewed, invited to speak, and recognized?

Once you answer these questions, find the cause. If the answer is not what you’d prefer, then find the cause of the poor performance and remove it or correct it. If the answer is very satisfactory, then find the cause of the excellent performance and perpetuate and exploit it.

You have to know how high you’re flying, be assured that you’re not in an inadvertent dive, and maintain the correct speed to remain airborne and climb when you’re ready.