How much of your working year will it take just to pay the tax bill? Or, how many prospects do you need in your sales pipeline to generate enough customers to make your profit larger?
If you’re struggling to answer these basic questions you are not alone. Most of the business owners I meet are not able to provide all of the key numbers they need to know to stay in control of their business.
When I worked for Tesco, the Store Managers saw detailed trading information every day and a full profit & loss every week! That was how they were able to make decisions and take actions to keep their stores on budget.
Why would you not have this level of information for your business?
The “reasons” I most often hear are:
- It would cost me to have the accountant prepare these numbers
- Capturing the information would take too much time and staff effort
- I have my finger on the pulse of the business and can “sense” how we are doing
Hopefully you will recognise the first two “reasons” for the excuses they really are. If you are playing the game of business you can’t afford not to keep track of where your profits are. The very very act of focusing on your numbers will in itself help you grow your profits. As for the third reason ask yourself if your Jedi senses are really as acute as you think?
Here’s a set of questions to give you a flavour of whether you are in control or not. If you are struggling to answer these then contact me and use a free 1-1 session to let me coach you in developing a business dashboard.
- What is my revenue, expenses and my margins? Have I passed my break-even point?
- What is my cash position for the next three months? Can I meet all my commitments?
- How many leads am I generating and where are they coming from? What is my conversion rate for each type of client?
- When will I reach the point at which I cannot service any more business without more people or plant?
- How often do my customers spend and what is the average value of a sale?
- Which of my products deliver the best margin?
- Am I meeting the service standards I have set for delivering to my customers?
- Where am I against my business plan and my budget profit?
Once you are in a position to answer these questions you are also in a position to take action to get or keep on track to hit your budget profit target and deliver the lifestyle you really want from your business.
In the next few days take some time to introduce yourself to the past, present and future numbers you need to control your business. You will be glad you did.Share