Your Business Numbers Will Make or Break You
Your Business Numbers Will Make or Break You
We’ve all seen the Shark Tank episodes where entrepreneurs are excited to pitch – they have a good feeling and a great product or service, but they don’t know their business numbers. Those are the entrepreneurs that inevitably crash and burn…on the show AND in real life.
This used to scare me in the early stages of my business because I didn’t know my numbers, either. It was easier to hide behind excuses like “I’m not a math person” than it was to admit that I was afraid of being with my money.
As an entrepreneur, you need to know where your money is coming from and where it’s going. That is why we’re in business – to make money, and therefore manage, money. None of that is possible without you getting intimate with your business numbers like never before.
Time to update your relationship status.
The first thing that’s really important in terms of knowing your business numbers is understanding your relationship to money. Ask yourself: “If my money was a person, what would our relationship be like?”
The ideal answer: You two hang out all the time and you’re always checking in on her. You have intimate conversations. You know her inside and out.
That might look like you’re looking at your bank account with love and excitement. You’re not afraid to spend money or not afraid to make money. This is the ideal scenario – that you have a best friend relationship with money.
However, let’s be real – not all of us have that kind of relationship with money. Some of us have a relationship with money like an ex – where you feel like you can’t trust money. You don’t trust that it’s gonna be around for you when you need it and you think that if you spend it, you won’t make it back.
If that sounds like you, I encourage you to check your relationship with money and put a plan in place to get reacquainted. No relationship can thrive without trust and it’s no different when it comes to your business numbers.
The more specific, the better.
Business numbers have to be specific – particularly when setting goals. More often than I’d like, I see entrepreneurs getting caught in the “I’d just like to make more money in business” trap when asked about their upcoming goals. I consider this a trap because without a clearly defined destination, how can you plan the proper route?
You can’t – so you’re bound to get stuck.
To avoid this trap, be as specific with your numbers as you are with your fast food orders. General statements don’t light you up, so stop making them. Instead, say “I will make $100,000 this year.” I know it feels scary. I know it can drive up your limiting beliefs – but if you don’t feel confident enough to be able to say, “I’m just going to throw this number out here and figure out the how,” then you have to go back into your work with money.
Are you struggling with your business numbers because you aren’t confident with sales? Click here to learn how to win every sales conversation and make more money in your business in the 12 months.
If you know me, you know that when it comes to business numbers, I swear by Profit First – a book and methodology on how to manage your revenue in order to have a profitable business.
You start to feel a little resentful of your business when you can’t give yourself raises or you’re not seeing the profit that you thought you would. Normal accounting procedures teach you that revenue minus expenses equal profit – but there’s a new model that has increased my business profits by 124% in just six of implementing the technique.
I recommend reading the book, Profit First, yourself to get a full grasp of the concept. I enjoyed it because it’s more like a workbook than a novel and also provides custom calculations for different revenue amounts.
In short, you would first take a portion off the top of your revenue and put that away as profit. Only after putting your profits aside would you would pay your taxes, yourself and finally your expenses. This method not only helps you to better track where your money is going but also ensures your business is always profitable.
In order to be successful in business, you’ll need to know your business numbers intimately. So be sure to:
- Face your limiting beliefs and find a way to establish a close relationship with money.
- Get specific with your goals so that you can get specific on how to reach them.
- Create a system to manage your revenue in the most profitable way.
CEO & Founder
My clients hire me when they’re overwhelmed, burned out and exhausted from burning the midnight oil without the results to show for it. They realize that wearing busy as a badge of honor didn’t work for them in the corporate world and still doesn’t work as an entrepreneur. I coach my clients and their teams on how to develop their intuitive leadership to make quicker decisions, take bolder actions and shift into a leadership style of authenticity.