Today, we tackle the very backbone of your business: the numbers. The late business guru Peter Drucker is quoted for having said: “What gets measured gets managed.” Tony Robbins has reworded this to: “You can’t manage what you don’t measure.”
Exchanging the word “manage” with “improve”, to the quotes become “What gets measured gets improved” and “You can’t improve what you don’t measure.”
Whichever version of these quotes you like, there’s certainly a lot of truth to them.
When it comes to your business, understanding the numbers isn’t just about management; it’s about steering the ship in the right direction. Every operation, every sale, every decision made is reflected in the numbers. Think of them as the pulse of your business, continuously revealing its health and vitality.
Why Numbers Matter
Your business’s reports, especially the Profit & Loss Statement and the Balance Sheet, act as its scorecard. These aren’t mere papers filled with figures; they’re narratives.
They tell the tale of how well your business is faring and, crucially, how effectively you’re leading it.
Ignore them, and you’re steering blindfolded. Embrace them, and you gain the clarity and insight required to make informed decisions.
Books in Good Order: A Non-Negotiable
If you ever find yourself wondering about the importance of keeping your books in pristine condition, remember this: Clarity breeds mastery. Accurate, timely financial records offer you an eagle-eye view of your business, enabling you to spot trends, address issues, and seize opportunities.
A question I often get is, “How do I maintain impeccable books?” The answer is simple: A great bookkeeper.
If you already have an efficient bookkeeper in place, take a moment to pat yourself on the back. Recognizing and investing in such a critical asset is commendable.
On the other hand, if your approach to bookkeeping is piling up receipts in boxes and hoping for the best come tax season, it’s time for an intervention. I understand the entrepreneurial spirit: always on the move, with a passion for creation and innovation. Often, meticulous bookkeeping doesn’t fit that mold. And that’s perfectly okay. What’s essential is recognizing the gap and taking steps to bridge it.
The Solution: A Stellar Bookkeeper
Many entrepreneurs admit that diving deep into the financial details isn’t their cup of tea. If you resonate with this, it’s crucial to delegate this task. In fact, as the business leader, I would not want you to also act as the bookkeeper.
A proficient bookkeeper isn’t just someone who sorts out your receipts; they’re the guardian of your financial records. They ensure that every dollar is accounted for, every transaction is logged, and every financial story is told with accuracy.
In conclusion, while the zest and zeal of entrepreneurship are invaluable, it’s the numbers that provide direction. Ensure your financial records are in stellar condition, and you’ll always have a clear map to guide your business decisions.
Until the next edition, keep thriving, keep leading, and remember: In the world of business, numbers never lie.
