If I were to ask you about your business’ best and worst months in the last year, could you tell me? Would you know what your revenues were, if you had any losses, what your profits were and if you exceeded or fell short of your projections? If you can, great! You’re good to go.
If you can’t… you should know these things! And not just for the obvious reasons. (This is why you especially need end-of-year numbers)
Know your business numbers
You’re probably saying to yourself, yeah, yeah, I know successful business owners need to know their numbers. They should have a handle on where they’ve been, where they’re headed and how likely they are to reach their goals. They should know where the revenue bleeds are and what products and people are helping their business.
But you can’t just pay lip service to this task. Business owners who don’t take the time to know and understand these important metrics really are doomed to fail. I’ve said it before: if you don’t know even know where you are, how the hell do you expect to get where you’re going?
In my experience as a strategist, I’ve encountered a shocking number of business owners and CEOs who don’t know their numbers. They either rely on the people around them to know those things and present them when necessary, or they believe they’re too busy and have no time to care about little things like reports.
No matter the reason, there’s no legitimate excuse in my book to not know these critical statistics. As a business leader, one of your most important tasks is to know your numbers so you can steer your business accordingly. Notice a revenue bleed in a product line? Fix it. Identify redundancies in some of the clerical staff? Pare down. Observe a group of employees going above and beyond to meet their goals? Reward them.
Look for what’s not obvious
Easy, right? Not so fast. Anyone with a basic understanding of accounting can memorize, and hopefully interpret, concepts like gross profits, margins and revenues. But there’s more to knowing your numbers.
When you go to the doctor, they’ll take your blood pressure, listen to your heart, maybe take some blood and do a metabolic panel to look at vitamin concentration, blood sugar and more. Physicians use this information from all the different parts of the body to identify potential problem areas. You need to do the same with your business.
To fully understand the health of your business, think about some numbers you might not find on a spreadsheet. How often do your employees smile? How often do they come to you with their concerns? How does their pay compare with others in your industry?
In some cases, these numbers are more revealing than the dollars and cents.
The Silent Business Killer
If you confirm you have a happy, fulfilled workforce, good for you. Your people will work hard, take ownership and grind to meet your goals, all with smiles on their faces. But if your numbers are low, you may have a morale problem.
Unhappy employees don’t care. They don’t bother to mention the broken piece of equipment that slows down production. They don’t hustle to meet their sales targets. They don’t help each other. And when this goes on too long, the success or failure of your business is at stake.
This type of workforce is a silent killer if you don’t know what to look for. So know your numbers and analyze the health of your business by looking for what’s not obvious.
Fail to stay on top of your business numbers, and your own complacency will catch up to you. I’ve seen this so many times, and I can’t think of a single example of widespread employee unhappiness not resulting in the whole business going to shit.
Don’t let your business go to shit. Know your numbers and take control of your business.