Know Your Numbers
Numbers, numbers, numbers. A good friend/boss of mine once told me, “You have to know your numbers.” If you own or run a business and don’t know your numbers, then you are destined for disappointment- whether in your operating performance or when you make that ‘someday’ decision to sell your business.
Here is a not so unusual example. Recently, we did our financial sleuthing into the statements of a prospective client of ours. Many questions came up and he had no answers. It has taken him over a month to get back to us with the answers. “I’m happy that you asked me for those details and I’m embarrassed to say that I do not know what is in my own financials. Now I do. Things have been going well for a few years and I’ve made a lot of money, but I just didn’t pay attention to the details.”
In other words, the company was really a checkbook for him. If there’s a lot of money in the till it’s good but you still don’t know why. And because of this, you don’t know if you could have been much more profitable. Every business has an opportunity to be more profitable…but, you’d better know your numbers.