The balance sheet tells you what you own, how much you are owed, and how much you owe to other people. Broadly speaking, assets are those things you own, or are owed, and liabilities are those things that you owe to others.

Liabilities include things like overdrafts, loans, and debts to other people (creditors). But are all liabilities bad?

Borrowing money means you have cash to do something with. If it costs you 5% to borrow £10k, and you are able to generate a profit of 7.5% through the activities you can make happen, then you are making a profit of 2.5%. Without borrowing the money you would have made no profit at all. So a loan can be a good thing, as long as you are making good use of the opportunity.

Investments in your business are liabilities. They represent the amount you have been loaned and, as above, you need to be sure you are making the most of the cash. Even “non-profit” organisations need to demonstrate that they are fulfilling their “non-profit” objectives. Is the cash sitting in the bank, or being used properly?

Liabilities also include Trade Creditors – money owed to your suppliers. It is important that you pay them within agreed terms, but don’t pay early if you don’t need to. This enables you to do something with the money.

All business owners and managers should know how much they owe to other people. Not just so they know how much they owe, but so they know how much cash they are sitting on that belongs to others and to be thinking about what they are doing with it.

Some lead, some follow – the world has always been this way. But what are the leaders trying to achieve? As a self employed person even I have to balance the “doing” with the “pioneering”.

But to what end. When I am no more, what will be left? What impact will I have made? Will the world be a better place?

The burden of responsibility rests on us all. Philosophers have always maintained that every one of us has the power to make a difference. It is not good enough to look around and expect someone else to make the difference for us. I agree with this.

I was recently introduced to a remarkable book called “The Tipping Point”. Its premise is that big things often happen as the result of the smallest of things. It is rarely possible to know what that small thing is until afterwards.

Standing still and waiting for everyone else to do something is not helping.

Is it your turn to be the tipping point?

Talking this over at half time, the difference seemed to come down to two points, France had had two lucky breaks, and seemed to be passing the ball out of the tackle more than Wales. And yet neither of these were included in the statistics shown on TV.

If lucky breaks can change the result of a game, then they should be counted and analysed. Do lucky breaks just happen? Or can a team prepare and train to spot them and take advantage of them?

In business, do we look at the statistics that really tell us what is going on? The amount of cash in the bank, or profit, are easy to measure and give us one indication of how we are doing, but they do not explain why the result is what it is, or whether it is better or worse than reasonably expected.

Whether as a Finance Director, or the coach of a national rugby team, I always look for the information and data that tells me what is really going on. Traditional statistics tell one story, but is it the most useful one?

Specific
“Joining a gym” is too vague, as is starting jogging. Ask yourself, why am I doing this, what is my objective – is it too lose weight (how much?), to give yourself some “me-time” (again, how much?).

Measurable
As above, how will you know when you have achieved it? If you want to “get fit”, how will you know you are fit? Is there an event you can take part in to demonstrate you have reached your goal?

Achievable
Do you want to run a marathon in 2010? Unless you have already started, you aren’t going to suddenly be able to complete the London this spring… Don’t set yourself up to fail. Pick one in a few months time to give yourself a good chance of succeeding.

Relevant
Why do you want to do it? Why is your goal important to you? Doing something for someone else is not as powerful a motivational force as doing it for you. It may be of benefit to others (as in “I want to start volunteering”), but what will you get out of it?

Time
When will you start, when will you aim to finish, are there milestones along the way to show that you are on track to succeed?

Succeeding in business uses many of the same principles we use in our personal lives. Sometimes you can succeed on your own; sometimes you need a little help. The trick is to know when to ask for help…

Much has been written about the “demise” of the Birmingham Post, and the genuine concern at what will happen to the journalists who are losing their jobs. I sincerely hope that those skilled at writing will find new employment, albeit in a different market. I would far rather read, or listen, to someone who knows their subject and can present it well, than someone who writes and broadcasts just because they can.

The proliferation of Blogs, and the ability for anyone to write when, and on whatever subject they choose, has been cited as the end of quality reporting. I would disagree. I have more faith in readers and listeners exercising their choice to read and listen to what they like, and to switch off what they don’t like.

I also believe that there is a duty for those who know what is going on to share their knowledge and expertise.

A brief look at Google Analytics revealed some interesting statistics:

• In the last month, their website had received just under 6,000 hits, and
• In the same period, only 54 click through’s to the contact form had been generated by the website, meaning that
• Less than 1% of visits had resulted in a request for a contact.

This was pretty depressing, but it explained why the business felt that it wasn’t getting much benefit from the website.

By looking at each page, it became apparent that there was no obvious “call to action”. Even if the visitor was keen to make contact, it wasn’t clear how they should.

I’m no web-master, but I do understand the importance of making sure the link between you, your product, your “shop”, and your customer, is seamless.

When was the last time you asked someone to give you honest feedback about how easy you are to locate, find out about, and to buy from?

The research found that beyond a point, more choice led to lower sales. Some choice was good, too much was not so good.

So how much choice is good?

I am sure the supermarkets have worked this one out but, as usual, I found myself thinking laterally. When looking for a solution to a problem, how many options are there?

I reckon that, with enough time and resource, there is no problem that doesn’t have a limitless range of possible answers. Ask an academic if you are unsure about this one… The problem is that we don’t have limitless time and resource, and have to make do with a small number of options.

Unless you have a “no-brainer” of a question, possible solutions can be grouped into categories. For example, the obvious, the wacky, the seemingly stupid, the clever, the smart.

However you face challenges, the trick is to not let the question become overwhelming. Which leads me to a favourite saying: How do you eat an elephant? Answer, one mouthful at a time. The saying neatly illustrates the point that a complicated question, with too many possible answers, could probably be simplified if it was broken into smaller pieces, so you don’t get indigestion…

The starting point is to work out how much it costs to “keep you alive” each month. This should include your rent or mortgage, your utility costs, average food bill, travel costs, a contribution to a small annual holiday, and a little contingency “just in case”. Let’s say, for example, that this amounts to £1,200.

You now multiply this cost by 12 to get your annual cost: £14,400.

Assuming an average working year of 220 days, you need to earn just over £65 every day to stand still. However, that’s after paying tax. So your gross earnings would need to be in the region of £80 per day.

So assuming an 8 hour day, it costs you £10 an hour to sit still.

It might not sound much, but every hour you don’t earn means you have to earn more in the other hours. Let’s say you only earn in 60% of the time. You need to charge about £135 a day, or £17 per hour.

So when you sit down to read or do something that you are not being paid for, ask yourself, is it worth £17 per hour?

I have had a few meetings recently with people looking to start a business. Some of the businesses were start-ups, some were buy-outs.

As a freelance FD, I was asked if the idea stood a chance of succeeding financially.

What we very quickly got down to was not CAN they make a success of the idea, but do they WANT to make a success of the idea.

Without the will to succeed, it’s very unlikely you will succeed.

With a determination to succeed, even average ideas stand a good chance of making money.

One measurement of economic output I was told about many years ago was the “crane count”.

Very simply, how many cranes can you see on the skyline of your city?

Each crane represents an army of workers delivering a building project. Each one represents confidence in investment. There is no such thing (unless I’m much mistaken) as an idle crane.

How many cranes can you count, and are there more, less or about the same as this time last year?