Understanding the Numbers in Your Business.
The numbers in your business are so important. It doesn’t matter how good your product looks, if you don’t understand the numbers in your business, you won’t have a business for long. Sound boring? Probably, but while you may think the numbers may be boring they are the lifeblood of your business.
Why don’t we look at the numbers?
I hear you “But I'm not good at maths!” Maybe not, but I find it intriguing that I hear this a lot from women and very rarely from men. Is it because men are better at maths? No. Is it because we have been conditioned to believe that men are left-brained and logical and therefore handle all the business stuff, and women are right-brained and creative and look after the creative side of business? Probably.
Let’s get real
Sometimes by saying that you don’t like maths is actually an excuse.
Maybe avoiding the numbers because you don’t like maths is another way of avoiding what’s actually happening in your business.
Maybe you don’t want to see what’s happening because you have put so much into it and you just want to succeed. That’s all ok.
The good news is you don’t have to be good at maths because your accountant or business advisor can interpret the numbers for you, and put them into language that you understand. What’s more, you can be taught to read these numbers yourself once you get the hang of it.
Let’s be honest, if you can use a basic calculator, you can work out the numbers!
So the motto is,
Don’t fear the numbers. They tell you the story of your business.
Why should you track the numbers in your business?
Determine your marketing efforts. Are your marketing efforts being converted to sales? If you have no sales, you have no business.
To know the profit the business is making. Sales is one thing but the costs associated with the sales as well as other costs such as rent, wages etc. may be greater than the sales themselves.
To know where the money is going. Your business may be making a profit but it may still be leaking cash. Remember – Cash is Queen.
To decide on the business direction. Once you know what the numbers are you can then continue on the path you’re on or steer your business in a different direction.
Need help with interpreting the numbers in your business? Call me on 0422 391 370