Are You In Control Of Your Finances?
One of the areas of your business you should look into it when improving your results is your financial control. If you’re not running off a breakeven report or understanding what your profit and loss sheet looks like then it’s time to change the way you manage your business.
To get a real grip on what’s happening in your business there are many Key Performance Indicators (KPIs) that you could develop and implement right now. You could start with just 5 and add to these as you learn what power rests in using these tools.
I know, most people don’t like talking about figures. The problem with avoiding figures is that it’s a form of denial that robs you of your power to make rational decisions.
Sooner or later you will have to confront them – do it now and head off any nasty surprises. Something as simple as a break even report will show you how much revenue (sales) you need to just to keep the doors open and pay overheads.
If figures scare you, then get someone who knows figures to analyze your “books” for you and set up some automated reports in your accounting software.
I’m assuming that you do have accounting software either desktop, or cloud based, that you are using to run your business. Get familiar with your profit and loss sheet. Check it weekly and roll it up into monthly.
A balance sheet that shows your assets and liabilities is also a great indicator of how healthy your business is. KPIs for your financials, marketing and sales should also be created and tracked each week for you to steer your business in the right direction.
Without these tools and maps in place for you to run your business you are operating blind. First place I start with any new client is the financials. Once the financials are under control, then we can move onto other more fun things to improve the business.
In my experience, the business owners who have a good grasp of their figures also possess the means to make improvements to those numbers through changes to their business systems.
Check out this post on financial dashboards to get an even better understanding of how to increase your business success by controlling your finances.