The year is almost half over. That means its a good time to take a look at numbers and make some decisions.
Yes, I hear your groans. I wish I could take pictures of my clients when I bring up this topic. “We just got done with tax season!” they moan. “Why do we have to look at numbers again???”
As I explained to Wendy, numbers are the heart blood of your business. The thing is you have to look at numbers as a business owner, not as a bookkeeper or accountant. Your numbers will tell you what knobs you have to turn to increase overall sales or profit. And if you’re not in business to make a profit, you’re in the wrong career.
Two important knobs are how much you are selling your products or services for and how much production is costing you. Business books are set up initially to conform to tax laws, not to manage a business. With your bookkeeper’s and office manager’s help, you need to tease out the numbers you need.
Wendy went through this exercise recently. She separated her costs and sales for lotions, toys and events. It look some time, especially since she often ordered lotions and toys from the same company and the costs were all lumped together in her books. What she discovered, however, caused her to eliminate certain manufacturers from her business. They were charging her more than she could sell the product for.
There’s people who will tell me they “know” when this is happening and they make adjustments by instinct. They don’t “need no stinkin’ numbers!”
Uh-huh. If you believe that, I’ve got a bridge to sell you….
Thoughts? Let me know your results of examining your books!
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