It’s easy to focus on forward momentum. Looking to the future naturally has an optimistic flair and so we spend more time thinking about it and planning it out. But if we don’t stop to reflect on the past, we’ll miss out on things we could learn. Mistakes that we could, inadvertently, be repeating and best practices that we might fail to adopt.
I don’t spend a lot of time reflecting on the past, but once a month I sit down and spend a morning writing out a business update that forces to me to look at what we accomplished, what goals we didn’t hit (and why), progress on important metrics and any other observations that come to mind.
One thing I think that’s actually really important here is to send this report to people who are outside of your business. And do it consistently each month.
This could be investors, a business coach or just a couple of other founders who are committed to helping you grow your business.
You need outside perspective from someone who can ask hard questions and notice where you may be dropping the ball. You’re also less likely to slack off and skip writing the report altogether if there’s someone waiting for it.
Now, for the format! There are five sections you should include in each monthly update. Having a consistent format forces you to cover the same areas of your business each month, making it really easy to spot trends and changes month-to-month.
There are a near infinite number of metrics you could cover, but it’s important to narrow down on one to two that are your key metrics. That’s all you should include in this section, along with brief observations on why those numbers are what they are.
Right now we’re focused primarily on revenue growth, so for us MRR and MRR growth is what I usually include (along with some tangential numbers like trial-to-pay conversion rates).
If you’re building software, you’re likely shipping lots of things every month (big and small) and it’s easy to forget how much progress your product has actually made.
List out the features and updates you’ve made along with any customer reactions or feedback to them. Then, list out what you plan on shipping next month to help set some goals.
Your books are one of the most boring aspects of business to keep up with. They’re also one of the most sobering sources of truth. It’s imperative you regularly keep up with things like cash balance, burn, expenses and runway.
Observations & Experiments
Building a business isn’t linear. It’s lots of hills and valleys. Lots of trial and error. Recording all the random observations and outcomes of the hunches you’ve had or the marketing experiments you’ve tried will help you see what’s working and what’s not and adjust accordingly.
This ties back to the accountability I mentioned earlier. The people who help keep you accountable also likely have some unique set of skills or experiences that you can and should tap into.
Wrap things up by including a single “ask”…some specific and tangible way they can help you. That might be feedback on a marketing idea, or maybe an intro to someone or perhaps some insight in to why you may be having trouble with growing one of your key metrics.
You won’t get what you don’t ask for.