Numbers Every Business Owner Should Know
October 26, 2017
Wouldn’t it be nice if you could predict your business’s financial success! Oh wait, you can!
Numbers aren’t something I love to pour over at the end of the day. But if you’re an avid fan of Shark Tank or Dragon’s Den (and I am) you’ll see the bollicking many owners pitching to the sharks (or dragons) get when they don’t know their numbers.
You probably don’t input them yourself, and as an advocate of outsourcing I really hope you don’t, but knowing how your business is tracking financially allows you to:
- Predict future growth
- Measure performance
- Make strategic decisions
- Discover problems, before it’s too late
For example, you have a bad month in sales. We’ve all been there! Rather than looking back to see what the cause was, by tracking the numbers regularly you can fix the problem immediately. You may touch base with your team to discover the number of hours tracked in the first week was low, in which case you put a plan into place to push through some projects before the end of the month to bring your revenue up.
Xero makes it very easy to know your numbers. Look at this management report we’ve mocked up as a demo. Get your virtual assistant or accountant to set up a similar report tracking the information you need to see in order to make decisions for your business, so your numbers are a tool rather than a historical record of your activity.
Set up your forecasts and budgets (again, Xero makes this very easy) and include measurement of these in your report.
Know which income streams are most profitable and where your overheads can be reduced.
In short, knowing your business numbers isn’t an annual exercise performed with your accountant but a part of your routine as an entrepreneur. Incorporating it as such means you CAN predict your business’s financial success (and it will be a success). As “they” say, knowledge is power!
To find out more about how we can help you make your business a financial success, book your free discovery call with Justine today …