How well do you know your numbers?
We’ve all heard the phrase ‘cash is king’. The age-old phrase refers to the importance of cash flow in keeping a business running. Without adequate cash flow, ie. money in the bank, you can quickly lose the ability to pay rent, suppliers, employees and other fixed and variable costs, a scenario that results in hundreds of businesses being forced to wind up each year. It doesn’t matter how much money is coming in the future, if you don’t have enough money to get from here to there, you’re not going to make it.
This got us thinking about how many business owners really understand their finances – cashflow, profitability, costs, and how even small changes can potentially have a large impact.
You might know what the headline figures of your monthly incomings and outgoing are. But do you know how profitable your business is? Do you know what your break-even point is? Do you have a good understanding of how extra sales could affect your top line? Or how additional costs might affect your profitability?
Knowing your numbers might be not be exciting or sexy. But it is clever.
As well as being able to more accurately predict how incoming changes might affect other elements of the business, having a grip on your finances also puts you in the driving seat when it comes to making business decisions. Business owners that do understand their key metrics, alongside having a firm grip on cashflow, can make decisions with confidence; armed with the knowledge of what the knock-on effect of their decisions is likely to be.
This is where the Agenda team come in…
We know our numbers – and we can help you get to know, understand and use yours better. We specialise in working with business owners to provide the coaching and advice that leads to business growth. Unlike other business advisers such as accountants, whom you may speak to only a few times a year, we work with business owners on a regular basis, so we’re there to help and advise when it comes to making the decisions – big and small – that have the potential to impact on your business and its performance.
Get in touch to find out more about how we can help you to use your numbers to your advantage.