If somebody tested you, would you score 10 out of 10 on your business finances?
As a small business owner I know it is vital to understand how my business is performing, which means getting deep into my numbers on a regular basis.
Do you know the answers to these questions:
- How much turnover did your business make last year
- If you are loss making, how much more do you need to sell to break even
- How profitable were you by customer / stock line / service
- Who are your best and worst paying customers
- How much are your fixed costs every month
- Is your business able to pay you a living wage
- How much stock are you holding, how much did it cost you, and how much can you sell it for
- Is your turnover high enough for you to have to register for VAT
- Which expenses are tax deductible
- How much is your business worth
If you know where your business is making money, and where it is struggling, then that information is invaluable. It gives you the ability to make clear, informed business decisions about where to focus your time, energy and money.
For the new business owner, understanding your numbers is one of the key components of business success. I know it is tough to juggle all of the demands of a new or growing business, but if you don’t get your business finances under control then you are making it much harder to succeed.
If you score 10 out of 10 on your business finances then you are putting yourself in the best possible position to take your business forward in the right direction. You need to control your business finances – don’t let them control you.
