Four secrets your business numbers reveal
They might just be digits, but numbers offer a wealth of insight into any business. They tell you how you’re going, where you’ve been and also allow you to set goals and plan for the future.
Importantly, unlike words which can be misinterpreted, numbers cannot lie. They are clear, they are obvious and using them should be a foundation for any business.
Here are four secrets your business numbers reveal.
Whether it’s your sales reports, your profit and loss or your Business Activity Statement, numbers paint a comprehensive picture of where you have been.
They illustrate growth phases, lulls, busy periods, successful strategies, and products which may not have sold so well.
When viewed over the history of a business, numbers tell you what worked and what didn’t. They also reveal the ongoing success or decline of your business.
In the latter case, these numbers may not be what you wish to see, but they empower you to make the change you need to turn things around.
Your current figures show you how your business is tracking compared to your past and your intended future. They allow you to see where you are compared to KPIs and also previous years.
This is incredibly powerful information for any business owner to have at their disposal.
If your numbers are telling you your business is not where you had hoped in terms of past performance or KPIs, it allows you to alter course or invest where required.
If your numbers indicate growth or that you have met your targets, it allows you to enjoy the win that can feel so rare in business and build further on your success.
An often-overlooked secret that numbers can reveal is the potential of your business. And sometimes this information is gleaned by the numbers that are missing or the gaps that become evident.
For example, numbers can reveal trends that you can capitalise on, products or services that are growing and could be added to further. They can also reveal inefficiencies in a business where you have the potential to cut costs and enjoy a better return.
Setting goals and having an up-to-date business plan are key to the success of any business, and your numbers are an integral component of both. Numbers transform arbitrary goals and ideas into action by enabling you to understand clearly where you are and where you wish to be.
Numbers then help guide this process, allowing you to set targets and key performance indicators.
Furthermore, numbers allow you to plan. When you have clear financial forecasts, you understand what you need to do, how you need to do it and the milestones you need to reach along the way.
Use the Force
For many business owners, numbers can overwhelming. When you’re a growing small business, they can also feel like the last thing you wish to delve into at the end of a long, busy day.
But when you know your numbers, when you understand them and when you use them to plan for the future, numbers can empower your business to achieve greater success.
They allow you to see your business for what it is, what it could be, and plan for how to get there making Better Business Decisions.
Want help to make Better Business Decisions
With over 30 years experience spent deep in the trenches of tax accounting and small business, Liz Jarvis is far from your average chartered accountant.
As the founder of Better Business Decisions, she is a passionate advocate for small and medium business, who educates and empowers operators to understand the story their business numbers tell.