Step 2 to optimising for profit & cash
Here’s the second step you need to take right now to pull more time, money & freedom out of your business.
Hopefully you’ve read Step 1 to optimising for profit & cash.
Once you’ve mastered Step 1, you’re ready to move onto step 2.
And if you haven’t done so yet, I’d encourage you to take our Thriving Lifestyle Business Scorecard & see how you measure up in all 5 steps.
The key principles around Numbers Knowledge are
1. Understanding how to “run & read” your profit & loss (over 12 months) both accrual & cash
2. Understanding cash flow & how to ease cash flow pressure
3. Understanding how to run & read your Balance Sheet
4. Understanding how to predict your obligations (ATO, Supplier & Employee)
5. Understanding your industries standard numbers (benchmarks)
6. Understanding what optimal business performance looks like (in the numbers)
Have you mastered these yet?
I’m going to assume for a moment that you have not mastered Numbers 101 and explain a bit more.
Perhaps your focus is on the day to day running of your business & maybe your number 1 focus is on Sales. But are the sales translating into profit & cash? How is your business really performing?
Is it performing “optimally”, Could you be squeezing more juice out of the orange? The answer is yes!
A lack of Numbers Knowledge means you’re probably leaking profit, leaking cash & missing out on easy wins that could save or make you a ton of money.
We find that when we engage our clients around Numbers Knowledge, they start saving and making money immediately. We’ve had clients save upwards of $80,000 in one meeting, just by being empowered around what it all means. Quick wins are often upwards of 10,000.
Here are my top tips for getting Numbers Knowledge under your belt
1. If you DIY the books reach out for some help to deep dive into your numbers
2. Using a Bookkeeper already? Ask her whether she offers Strategic Bookkeeping services that can help you understand what it all means
3. When working with anyone in Numbers Knowledge, use my 6 fundamental points listed above as a guide so you cover all bases
4. Prioritise this. Make time in your schedule to know your numbers.