As the CEO of a company that develops software designed to help entrepreneurs plan and track their businesses, every day is rewarding for me. I have helped hundreds of new businesses succeed, and I employ dozens of individuals who share my passion for entrepreneurship. Along with all of the positive, however, a CEO's job comes with stress, pressure, constant worrying, and the feeling that there's never enough time.
The CEO is the ultimate decision maker, leader, visionary, and implementer of a business. That's a lot of responsibility riding on one individual. While I have a wonderful team that helps me manage and run my business, I understand firsthand how the stress of being a CEO can accumulate.
I started running Palo Alto Software a year before the Great Recession. I took the first year I ran the company to get my bearings on strategy, employees, what was working, what we needed to change, and how I would begin to implement my vision. I started to lay out my plans, and then--bam-- the recession hit.
All of a sudden everyone stopped buying things. Most businesses were hit hard, and software was no exception. We were still getting traffic on our website, but our conversion rates plummeted. It was a time when "panic" seemed the appropriate state for everyone. But what we did then is why we are where we are today. We took our plan for FY2009 (FY2009 started in Oct 2008 and ended in Sept 2009) and adjusted it. We looked at every expense to see what we could cut back without hurting the business and without having to lay anyone off. It was definitely a stressful, intense experience.
With the help of my COO, we were able to cut almost $20,000 per month out of expenses from infrastructure and operational services. It turns out it was a great time to negotiate with providers, who were also struggling and didn't want to lose our business. We ended up getting better, faster service for less money. We used the $20,000 cut off our expenses to keep employees, and set a budget and a forecast that could sustain us for a year.
Every week we checked in on revenue and expenses and looked at where we were vs. plan. We shared our plans and sales target with our employees, who were also worried about what the recession would mean for their jobs. Every month we had an all-company meeting to present where we were and how we were doing compared to our targets. Looking at numbers in the context of PLAN vs ACTUAL became vital and kept the business on track. And every month that we made our revised numbers, I slept a little bit better at night.
We have used our experience and our methodology at Palo Alto Software to build our own products for small business. LivePlan was conceived as a management tool, after our experience, so that we had a tool that would allow us to plan, and then manage to that plan.
So if you are running your own company, and experiencing all the stresses a CEO has, you can apply some simple strategies to help you manage your business, and also rest a bit easier.
Having a grasp on your financials is the first step in minimizing stress. I create budgets and financial forecasts for every fiscal year using the previous fiscal year as a base and then adjusting for growth. I then use my forecast to budget my expenses and develop a clear picture of our cash on hand, what we're expecting for revenue, and exactly how much we'll have left after expenses. This reduces the "unknowns" that are often the cause of increased stress and sleepless nights. My forecast for planning purposes is usually a little more conservative than sales target our sales team uses, because I budget against my management forecast.
Review & Monitor Daily
There are certain financial indicators that I track daily: direct sales, SaaS signups, and cash in the bank. I know these numbers so well that I am able to recognize normal decreases and increases and notice if an unfamiliar pattern forms. Knowing where my business is at financially on any given day allows me to better focus on the bigger picture for where my company is headed long term. It also allows me to quickly make decisions about whether we can afford to add a marketing expense, go to a marketing event, or hire a new person.
Additionally, I invite my entire company to weekly budget reviews to ensure that everyone is on the same page. We go over the previous week's sales in relation to our forecast and compare these numbers to the same week of the previous year. It gives me peace of mind knowing that my team is there to step in and solve the problem if I miss something.
Take Advantage of Technology
As the CEO, I am responsible for advising and leading all areas of my business. While I have complete trust in my management team and employees, it is nice to have easy, on-the-go access into what is going on should a problem arise. When looking for a cloud-based tool to minimize stress, I look for the following:
- Clear Insights: When I am busy, I need tools that can wade through my company's expansive data and tease out what is most important. When tools have attractive dashboards that are easy to understand, it becomes much more appealing to diligently track my business.
- Easy integration: New tools need to work with the old systems my team has grown to love, not try to overhaul them. Cloud-based solutions that work well with Quickbooks, CRM software and other daily necessities are a must to ensure a smooth transition.
- Perspective: Tracking and monitoring are great, but they mean nothing without context. Tools that look at my progress and how it aligns with past benchmarks gives me a more accurate picture of progress. Even better, I need a tool that uses my progress and goals for the future to forecast my financials and move my business forward.
Though I've had some sleepless nights, there's no job I'd rather have than being the leader of such a successful and impactful company. The stress that accompanies the job title is inevitable, but I can take it in stride when I know I am in control. When you plan and monitor your financials, trust your employees and take advantage of technology that is designed to make your life easier, you can maintain peace of mind and enjoy many more good nights of sleep.