Do You Know the Numbers?
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Many small business owners are clueless as to how much money is being generated by their business or how to create consistent cash flow. Are decisions being made based on emotion rather than choices regarding an understanding of money?
Do you understand the language of money? Money is so simple, yet at the same time so complicated, because it operates in ways that are emotional and unspoken. Every important relationship including money, has its own history, develops its own story, and evolves its own language. Even though we talk about money regularly, think about it daily, we may not know how to clearly and simply tell our money stories to ourselves to see what needs to change.
It is the emotions that come with our finances that are often the heart of the problem. It's up to you to get a clear picture of the vision you have for financial stability in business and personal life. A little perspective goes a long way when it comes to keeping emotions in check.
By understanding your business and its numbers you get a feel for the service or product your target market is most likely to buy, which are the most profitable, and which to cut. If you know the numbers, your business will grow as a direct result of these decisions.
The right key numbers in front of you can multiply your profit by changing your business approach. How can you manage what you cannot measure? It's not possible to manage a business if the results cannot be measured. If you know the numbers you will always know where you stand and what products or services are your best sales.
Benefits of knowing the numbers:
* Extra funds to improve branding
* Cash to hire an assistant
* Avoid borrowing money
* Money to develop new products
* More resources
* Family vacations
* Time to meet friends for coffee
* Work on whatever you want, when you want
Are you able to focus on the profit margin to grow revenue? If you are not able to distinguish between profit revenue, margin, and break-even points the business numbers need another look.
Become familiar with your business to grow a consistent profit. Have you looked at the business model? Does it match personal priorities? Do you know what to change and what to add?
Speak to your bookkeeper or accountant and find out the margins. If they are not healthy, discuss how to beef them up. If you don't know your conversion rates, find out what they are. Should you repackage your products and perhaps increase your prices? If you have your financials in electronic software learn to produce reports from that software. If you are using a spreadsheet to manage your business learn how that spreadsheet works. See how it can give you the numbers that show how successful you and your business are. If you need help with your cash flow and conversion rates ask for help!
If you are a start-up business or a business of 5 or more years and need assistance getting your data into financial reports give us a call for assistance. We have many packages large and small that support all types of businesses in different stages of development.
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