Are you up or are you down? It’s time to check the scoreboard… if you have one
With only 8 weeks to go until the end of 2016/17 financial year aren’t you a little curious as to how your business will look, results-wise, come June 30? The correct answer here is “no”. Bonus points if you added an exclamation point. Apart from curiosity killing a cat, what’s wrong with wondering if you finished in the red or the black, up or down, flat or flush? The reason “yes” to these questions is a red flag, is because you should already know. Maybe not down to the last 10cents, but at this stage of the game there should be no surprises and no need for guesswork or crossed fingers.
Knowing your numbers provides the answers to all of these questions. It even answers the question, “how can I tell what’s going to happen in June when we’re only in the beginning of May?” That’s the beauty of having a full picture of all the numbers that matter to your business. They will not only tell you what just happened but they will offer clear insights into what will happen next.
The scoreboard should tell you more than just the score
When we at Inspire recommend that small business owners establish and regularly check their scoreboard or dashboard, we’re not simply looking for the amount of money in the account. While cash on hand is important (vital actually) it doesn’t tell the full story. Buried (but not too deep) in monthly and weekly numbers are profit drivers and lag indicators. They are hiding in plain sight just waiting for someone to take a look at and formulate some next steps based on what the numbers are saying.
Too often, small business owners see a lower than expected (hoped for?) number and start feverishly cannibalising their own margins to prop up the turnover figures. Dangerous. Very dangerous. We’ve talked about how times of difficulty call for an increase in value not heavy discounting. With a clear view of the numbers, problems are solved while they are still just lag indicators, leaving you plenty of time to prepare your countermeasures. Similarly, when forecasts indicate an upswing in sales based on real data, a knowledge of your numbers will signal the right time to take advantage with added investment in staff, capital or simply a larger safe.
Using a dashboard regularly (weekly) and for its intended purpose, represents an investment of time and money that will pay for itself many times over, regardless of the story it tells. “Forewarned is forearmed” and “first in, best dressed” are the key messages that highlight the value of knowing your numbers. Not just the ones that tell you what happened in your business, but the ones that show what can happen for you.