Managing Your Numbers

Image from Unsplash by StellrWeb

I’ve mentioned — many times — that if you don’t know or manage your numbers, your numbers will manage you.

What does that mean? Well, when you are chasing dollars to pay your bills, when you are unable to manage whether the dollars will come or not, it’s hard to run the business because your energy, focus, and concerns are in the wrong place.

What I’ve learned is that sometimes entrepreneurs take that the wrong way, because they’re thinking I don’t have a steady income or I don’t know what will happen.

That’s probably true when you are starting out — but as you continue beyond two or five years, the easier it is for you to gain insights by reflecting back to determine the average yearly revenue.

You might say it’s not consistent — one year this, the next year that — but still, take the average and see how you are trending so far. Or, before a new year starts, see what you could be doing next year based on what you’ve done this year.

Look at sales, revenue, deposits, spending. Dive in to understand where the money comes from, when does it come, how often is it coming, what’s the average sale, and then look at how you are spending, how fast is it being spent, and so on.

Let’s say for easy math that you averaged $10k in sale per year in the last three years. Maybe one month you had…