Are you damaging your business?

Take the time to really look at your numbers – you may be amazed at what you’ll find!

We’ve all heard the saying “you don’t know what you don’t know”. This basically means that there is a minefield of information that you can use to make decisions regarding the future of your business and it all is in your numbers. So what damage are business owners doing to their business by not reviewing their numbers that they aren’t even aware of?

A few examples

The first example is of a client I worked with who for two years consistently spent 6% of everything he earned in bank costs.  By reviewing his numbers with him we were able to find this little gem of information. Beforehand he wasn’t aware that of every invoice he sent out 6% is going straight through to bank charges. Using this information he was left with a choice: make sure he increased his prices to recover that 6% or be happy with what he is marketing his products to his customers for and be happy to carry that 6% cost. The point is, at least he had the correct information to make decisions in the future.

Another example was a client who didn’t realize her subcontractors were charging her three times as much as she had originally anticipated. Finding this information in her numbers was a huge wake-up call as she saw how much they were draining her profit. She was then able to go back to her contractors and monitor the time spent closely resulting in her being charged 1/3 of what she was previously. A great benefit to her cash flow.

The last example is a client whose staff was killing my client’s cash flow simply because they were not ordering stock often enough. Because of their sporadic ordering, they were leaving stock to be ordered every few months instead of every month. Armed with this information, my client was able to put systems and performance indicators in place for staff which greatly alleviated the cash flow issues he was having previously.

These three examples clearly demonstrate how these business owners were unaware of the damage they had been doing to their business and their cash flow because they didn’t know these gems of information were sitting in their numbers.

I ask you to begin reviewing the numbers in your business regularly. You may find some gold in there in terms of the pricing of your products and services and how to improve the cash flow for your business.