We talk about the importance of knowing your business numbers a lot, as you’ll be aware if you’ve been around us for any length of time. There are lots of reasons why getting a good understanding of them is a really smart thing to do if you want to be successful, but it can be hard to apply those reasons to your own ‘day to day’.
With that in mind, I thought I’d give you a real life example.
Several years ago now, we were involved in a large event as exhibitors. As a lead gathering exercise we ran a competition on the stand, to win private ‘Business Numbers’ sessions with Chris. During these, he took three business owners through a no-cost-to-them tour through their business numbers on an individual basis.
One business owner travelled to us from quite some distance away, staying overnight in a hotel to do so. They viewed this as a really valuable opportunity to get some free quality time with someone who could make a tangible difference to them. This wasn’t coming from their current accountants. They’d run the business for some years, were well prepared with information, but didn’t have a very firm grasp of the detailed business numbers. They weren’t sure which ones they should be monitoring carefully, and weren’t confident.
What they did have though, was a drive to make it work.
They wanted to support themselves and their staff, and the wider community they were a part of. They were certainly not scared of hard work and were prepared to take the opportunity to learn.
As the conversation progressed, it began to become clear that the major reason they were struggling to make headway, despite their dedication and sheer hard graft, was the tiny margins they were trying to operate with. They were never going to make ‘proper’ money on the volumes they were selling, while the location and business model didn’t support significant change.
It wasn’t the most positive session, but the value was seen and appreciated, and we kept in touch over time.
In late Summer 2015, we saw the business owner briefly at an event and weren’t surprised to hear that the stress levels and effort required just to stand still had forced some hard decisions. The business had been closed, and a marked change of lifestyle was on the cards.
Fast forward over two years to a very recent conversation, and a new service business has been set up, in a totally new field, that works much more effectively. The business owner now knows exactly what level of clients they need to bring on board, what their time is worth, and has significantly less stress and worry.
Unsurprisingly, there is still some catching up to do for the subconscious, which still associates running a business with stress and that constant need to push so hard that was the previous norm. For the most part though, the business owner now enjoys life, has more time, less stress, and a much better balance.
The difference is lovely to see.
Though this isn’t a typical example, it does show one extreme of knowing your business numbers; they can show you whether there is real potential for making your business model actually produce the results you want. There are times when no amount of effort will make things work. At that point it’s no-one’s fault, but changes need to be made.
Without a clear understanding of the numbers in your business, you could be doing as this overworked and overstressed business owner was, and effectively trying to push water uphill.
Can your health and sanity afford for you to keep doing that?
If you’d like help to give your business model a sanity check, please do get in touch. We can spend half a day with you and get a clear understanding of your business. We’ll help you look under the bonnet and identify the numbers that will make a significant difference. We’ll also explore the validity of your existing model, and suggest changes or tweaks that might improve matters.
This can easily be a one-off appointment, that stands entirely separately from your existing arrangements; there’s no pressure to move to us for any other services.
If numbers aren’t your strong point, don’t worry!
You certainly wouldn’t be the first person (or the last!) to look at us blankly when we start to delve into the detail, and we don’t think badly of anyone who needs help. It can take a lot to admit you need some support, and we appreciate it if someone trusts us enough to ask. We speak everyday English rather than ‘Accountant’, can find lots of ways to explain if it doesn’t make sense the first, second or third times – and we keep the kettle on!