You don’t have to be an accountant or even pay an accountant to tell you that your numbers should be close to your heart.
In business, they should be your everything.
Do you love your numbers?
You don’t have to be good at maths or bookkeeping, or finance, or even at business, for that matter, to understand the story of your business. The characters, plot lines, jeopardy, and page-turning, stomach-churning narrative that comes with owning and running a small business.
It’s fascinating, and it’s all numbers.
It should be a love story.
Numbers tell your story, what you do and how you do it, your efficiencies or otherwise. Numbers reflect every decision you make. They reveal secrets you never knew you had. Tell anybody interested whether you’re sticking to your own rules, whether you even have any rules?
Numbers are the who, what, why, where, how and the ‘why’ of your business
And for all you out there shouting, ‘I have an accountant because I don’t do numbers!’ Think again. It’s your story.
Don’t you want to know what happens next?
Love by numbers
If you do and need to catch up, these are the all-important plot points:
Cashflow. What comes in, and when. What goes out, and when. If there’s more coming in than going out and a big enough gap between money coming in, before it goes out again, you’ll have a happy ending.
Anything else, and you’ve got a cliffhanger developing, every day, week, month until you’ve finished your novel.
Net income. Is there a future for the main character (that’s you)? Take all the money that comes into the business, subtract everything that you pay out to make the business work. The difference is net income. Is this number above or below zero?
Profit and loss. Take the developing plotline a lot further, and you’ll have your profit and loss. Look ahead at everything you plan to sell and all the costs you’ll have to bear to make those sales. You’ll not only see the way your story may unfold, but you’ll also see the pace of the story when things might get sticky, when your hero needs some help, where other characters may need to be brought in, what might happen.
Sales. Pure and simple. What you’ve sold, when you will sell more, how much more? Just as a good story changes pace, so do your sales with peaks and dips. Both scenarios need your attention, reader.
Gross margins. Call it the sub-plot – the difference between the price you sell something at, and either the price you bought it for or the cost of you producing it. The bigger the difference, the wider your margins and the more profit each sale generates.
Your unfolding love story, chapter by chapter
The five essential elements of every business.
It’s all there, but maybe not as you’d recognise it, in numbers, not words.
We can teach you how to read, love, and not fear your numbers.
Start your business love story here. Call 01482 631700 for a free consultation
