Before you read further – what do you think the most important thing is in your business?
Some might say it’s your product or service. After all, without something to sell, you’ve got no business at all.
Others might say it’s the people – your employees.
Or your mission, vision, and values.
Or your organizational culture, and how you establish shared meaning.
All of these are important
But – as you may have guessed from the image – while all are important, none of them are enough to have a thriving, growing, successful business.
You need to know your numbers
When you don’t know your numbers, you don’t have a way to measure success.
You have no way to determine what changes you want to implement, never mind the effectiveness of those changes.
You can’t tell whether a particular division, marketing effort, product, or service is profitable … just breaking even … or a dead loss.
You don’t know what you’re doing right.
And you can’t develop effective strategy or know what tactical action will be most productive – because you don’t know where you are or what needs fixing.
To draw an analogy, if you don’t know whether you’re in New York City or San Francisco, it’s difficult to figure out how to get to Paris.
If you don’t have a blueprint, it’s hard to build a house.
And if you don’t have a chart or a compass, you might have the best ship’s crew in the history of sailing, but you’ll have a very hard time knowing where you are and getting where you want to go.
It’s more than just how much is in the bank
A healthy bank balance is great, but it doesn’t tell you what’s really going on.
You need to understand how your money is coming in, and where it’s going.
It’s all too easy to “fluff over” your numbers. You have a sort-of idea, you think you know, you can ball-park it …
But that’s a bad idea.
The single most consistent thread I see (as in, every single time!) when I’m asked to help a struggling business is … they don’t know their numbers, and so they’re struggling because they don’t know where to focus their efforts.
Do you know your numbers?
What are they telling you?