Do you spend enough time on the numbers in your business?
The numbers, or KPIs, around any business can be really powerful in helping you make the right, informed decisions. Do you spend enough time on them?
Watch this to find out!
Hi and welcome to another episode of BaranovTV, designed to demystify the world of accounts and tax, and to help your business grow.
In this episode, I may well be repeating myself. If you’ve known us for any length of time, you will probably have heard this message before but I’m really kind of ‘sorry, not sorry’, because it’s really important.
If you spend regular time on marketing your business, you should also spend a similar amount of time on knowing your numbers within your business.
Now, I also talk about making sure that you set time apart to get and keep customers within your business because that’s what we’ve always done and that’s always served us really well.
But I really do think it’s important that you learn where your numbers are and which are the important numbers within your business.
- It’s vital to be sure that you know which of your sales are profitable and, by definition, which ones aren’t.
- It’s vital to know where your cash is going.
- It’s vital to know when you’re going to run out of cash, if that’s going to happen.
- It’s really important, if you have no idea of how much you’re paying for a lead or if you have no idea how much profit each job is actually making you, or which suppliers are charging more for the same product, or which clients are most valuable in terms of referrals or sales or repeat sales…
Any one of these numbers might unlock a major change in your business; if you don’t know them then you’re letting all of that go.
Constantly feeding the sausage machine with new customers coming through on sales that aren’t necessarily profitable is just daft.
It’s a waste of your effort when, if you just slow that sausage machine slightly, look at the numbers, get those right, and then start feeding a profitable sausage machine again, then all of a sudden your business can go great guns.
You can potentially look at your pricing, all sorts of things that can make a massive difference to your business and reduce the amount of effort that you need to put in, to get the same amount out at the back end.
Not everybody is really comfortable looking at numbers and I know that; I’m not a massive numbers person myself and I rely massively on Chris for that.
So if you’re not sure, what do you do?
Well, speak to us to start with!
We can help demystify all of that for you.
Lots of people set up in business because they’re good at what they do, not because they’re numbers people or because someone’s taken them through how it should all work and how it all ties together.
Often, having been taken through it once, twice, a few times, it starts to click. You can then start to see how things tie together and that’s where, as a business owner, you really need to be.
You do have other options!
If you really aren’t a numbers person, or you struggle to understand the different KPIs that can make a difference, you need to find an alternate approach.
It can transform a business to have the right support around you. That could be internally if you’ve got a bookkeeper, it could be an external bookkeeper. Either way, you need to find somebody who can just make sure that those key numbers are provided to you, on a regular basis, so you can review them and make good decisions from them.
If you’re running a business, it shows that you’re not daft.
It may just mean that you don’t have the skill base, currently, to get the most out of your numbers. The smart thing to do is not to hide from them, but to accept your limitations, address the issue, and then start to move on.
We’re really happy to do that with you if it would help!
Spend the time getting to know the numbers in your business and, if you get to know what they look like, then you can start to see the impact that changes within the business has on those numbers. You can start to see them changing and start to see the trends.
There are some KPIS that are more important to a business than others will be. No business owner needs to track a great log list of KPIS every week or month. There are some that will be key to your business though, and watching those will make the biggest difference.
And if we do sit down and chat them through with you, we can help make it easier for you to find those KPIs.
Either way, it’s really sensible to make sure you’re spending regular time looking at and reviewing your numbers. It can make a massive difference to any business.
So that’s my message for this week and I’ll see you all very soon.