If I had a dollar for every time I have heard business owners, (particularly women) say this we would be dinning in Monaco – weekly!
There seems to be this perception that you are either good at numbers (whatever that means) or you aren’t. Whether you like them or not, being a business owner means you need to be good at understanding the numbers that drive your business, even it mans having someone else doing the number crunching for you.
My Mum is a classic case of this ‘numbers just aren’t my thing’ story. Yet she has no trouble in following the calculus-like knitting patterns and turning out intricate and beautiful garments. For the non-knitters among you, there’s a lot of interpreting numbers in those patterns.
And all women can follow the numbers involved in a recipe, but when it comes to business and the term ‘Profit & Loss’, or ‘Return on Investment’ many women’s eyes glaze over and the, “numbers just aren’t my thing” response comes out.
OK girls, it is time to get real! You can’t manage or grow your business until you get your head around the key numbers that drive it. I am not saying you must turn yourself into an accountant, but as a business owner you must know these key numbers (if it helps to think of it like a recipe for business, then go with it…).
- How much do you sell each month?
- How much do you spend each month?
- How much is left over for me?
- What do my customers owe me?
- What do I owe to my suppliers?
- How much is in my bank account?
Once you get these fundamentals under your belt, start to expand the list and start to drill down into more detail. Then add in some key areas that you want to target and grow – or reduce if looking at expenses.
Getting comfortable and familiar with the numbers in your business is a learned skill. But after a while, it will become intuitive, just like driving a car or riding a bike.
If you are struggling to understand the fundamentals of your business numbers, you need to find an advisor that you can relate to and speaks in a way that you don’t feel you are being talked down to or made to feel incompetent. You are learning a new skill and it takes a little time and patience.
Above all, don’t be afraid to ask for help or change advisor if you need to.
When it comes to the numbers in your business, ignorance isn’t bliss – the tax man will be the first to tell you this! If you don’t get a handle on your business numbers, it will come back to bite you further down the track.
Look at it from another angle. You probably have gone into business with a passion to do what you love to do and to help your clients or customers. By having your own money in order, think how much that frees up your headspace to go out there and be the best that you can, to do more of what you love to do and help more clients.
If you want to know more about understanding the numbers in your business – and in your life, book a free strategy call with us by clicking this link.
If there isn’t a time that suits you, drop us an email and we’ll arrange something.