Want Your Business to Grow? Start with Your Numbers!

                                                          Want Your Business to Grow? Start with Your Numbers!

When people start a business, they’re usually excited about a big idea. They want to use their skills and talents to make money, feel successful, and have more freedom than a regular job. And if you ask a business owner if starting a business improved their life, many will say yes—but not always for the reasons you’d think.

Many people imagine that business owners have it easy. They see the success from the outside and assume it must be great. But the truth is, owning a business takes much hard work, long hours, and tough decisions. Just like an athlete must train hard to win, business owners must work hard to succeed. They take risks and don’t always know what’s coming next.
That’s also part of what makes owning a business exciting. It pushes you to grow, learn, and improve.
So, how does your business grow? One powerful way is learning and growing with your financials—your numbers. It’s not as scary as it sounds!

Let me tell you about a friend. He runs a very nice business and works with some very famous clients. But when he wants to know how his company is doing, he checks how much money is in the bank. That’s not a smart way to run a business. Why? Because he doesn’t know how much profit he’s making or if a particular job costs him more than it’s bringing in. And what about inflation or pricing changes?
Even if he “feels” things are going well, wouldn’t it be better to know? Wouldn’t tracking all of this and ensuring he’s making money be safer?

Many small business owners are out there working hard, trying to survive and grow. But without knowing your numbers, your business is at risk—even if things look okay on the outside.

So, how do you start using your numbers to grow?

1: Keep your books accurate.
First things first—your numbers have to be correct. If the data is wrong, the reports won’t help. Hire a good bookkeeper who is experienced and detail-oriented. Don’t be fooled by ads that say bookkeeping is “easy.” It’s important work—just like you wouldn’t hire a host to cook at a fancy restaurant, don’t trust your finances to someone who isn’t skilled.

2: Learn your basic reports.
Know your Profit & Loss Statement, Balance Sheet, and Cash Flow Statement. These three reports tell you what’s going on in your business. Hire an experienced professional who can show you how to read your reports. Advisory Accountants, Financial Counselors, or fractional CFOs are professionals who all help translate what your reports are saying.

3: Review your numbers every month.
Make time every month to go over your financial reports. Going through every month consistently will help you catch problems early and make better decisions.

4: Create a Budget
You can get more aware and efficient with what is going on with your finances if you set budgets and targets for spending. It allows you to have a binocular look at what is happening within the spending, and you can keep spending from getting out of control.

5: Watch your payables.
It’s easy to spend money, but it’s hard to get back once it’s gone. The only money you can genuinely keep is the money you save.

6: Keep learning!
Money is a big part of the business. The more you grow, the more helpful it is to understand how your numbers work. Always be learning and improving.

Bottom Line:

You don’t have to be a math genius to grow a successful business, but you need to understand your numbers. You’ll feel more confident, make smarter decisions, and build a more substantial business when you do. Asking for and hiring help with your business financials is one of the best returns on your investment in your business and mental health.

Related articles:

How do you know your accounting numbers are accurate?

Cash Flow Basics