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Who Will Tell Your Company’s Story When You’re Not in the Room? Here’s How to Make It Speak for Itself.

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Who Will Tell Your Company’s Story When You’re Not in the Room? Here’s How to Make It Speak for Itself.

Here’s how to build a business that can explain its decisions, financial history and direction — even when you’re not in the room.

Every company has a story. In many small businesses, however, that story can be told only by the owner. The owner knows why money was borrowed, why equipment was purchased, why a key employee was hired and why the company changed direction. But what happens when the owner is not in the room? What happens when the owner must defend a past decision and has only memories and recollections to offer?

A company should not depend upon its owner to explain every important action. Its records should be capable of telling the story. Three components build that narrative: the business plan, the bookkeeping and the corporate records. Together, they explain where the company intended to go, what actually happened and who authorized the important decisions along the way.

The business plan should not be a ceremonial document written once for the purpose of landing a bank loan. It should be a periodically updated record of management’s thinking. A useful plan explains the market the company serves, its competitive position, growth priorities, staffing and capital requirements, major risks, marketing efforts and the expected purpose of significant investments.

The plan provides context that financial statements cannot supply on their own. Suppose recent statements show weaker earnings because the company hired additional staff, opened another location or invested in infrastructure. The numbers reveal the decline in current profit, but the plan explains whether management expected it and what the investment was intended to accomplish.


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