By Laura Wallace | July 10, 2018
As a right-brain by nature, numbers have always been my least favorite part of a business. Crunching numbers, spreadsheets, reports and tracking felt just as exciting as eating one more piece of pie after you’ve already stuffed yourself on Thanksgiving. It was uncomfortable and made me miserable. “I’m a creative person, numbers aren’t my thing.” was my motto and I stood by that strong. Until recently.
Like many entrepreneurs, I started to wonder why we were working so hard, but our bank account wasn’t reflecting it. How on earth do we barely have time to breathe but we’re still stressing about cash flow? I set out on a quest to figure out what on earth I was missing. I understood that numbers were not my strength, so I brought in an expert (my accountant) to dig into the layers and help me find the holes that I felt blinded by.
Let’s just say that 4.5 hours, a few big sighs and 5 pages of notes later, we figured it out. By not knowing my numbers I was not understanding the facts. And by not understanding the facts I wasn’t properly managing time. And once we discovered the problem, it was like a flashing red light in front of my face.
There is power in knowledge and when you’re running a business, sometimes you have to learn things that you don’t want to in order to help your business thrive. Even if you have an accountant or a “guy or gal” that does your books, do you truly know your numbers inside and out? I’m a big fan of the show The Profit. Marcus Lemonis always pushes knowing your numbers because, without it, you can’t make well-educated decisions to grow your business. “Your weekly or monthly statement is your roadmap to success.” You can’t make a financial decision based on your gut, you have to make it based on facts.
Here are a few things I’ve learned in the past few months that has helped me transform my business:
Turn off the blinders and get in there
All too often we just “don’t look” because if we don’t know, then it’s not as bad as it may or may not seem. You’ll do yourself and your business a huge favor by pulling back the hood and just digging in. Once you know what’s going on you can fix it. It’s hard to fix something you can’t see.
Find the holes
What is causing you to lose money? Where are the holes where money is slipping out? If you’re not sure, bring someone in to help you. Investing in them will pay itself back tenfold if you follow their advice.
Create a plan
Now that you know what’s going on, how are you going to fix it? What parameters are you going to set? Where do you need to shave costs? What needs to be adjusted and when will you do that by? Knowing is only part of the plan. Having a plan to change the situation is what makes the difference. Share your plan with key people and your team so they know how to help you.
Stick to it
Once you have a plan in place, stick to it. Check your numbers regularly. Compare your data from prior months to see how the change is impacting you. Watch how the health of your company starts to grow and then keep doing what’s working.
While knowing your numbers is essential, it doesn’t take the place of the mission and vision of the company. Don’t become so consumed with the numbers that you lose sight of people, relationships, and company morale. Use them as a tool to strengthen your culture and client relationships so you’re making stronger, more sound decisions that lift everyone involved. I can tell you that while I wasn’t a numbers gal, I sure as heck am now.