Do you know your business numbers? It’s one of those areas of business that many shy away from, but it’s a crucial element you need to understand, if you want your business to grow and be profitable. 

So why is it so important and what numbers do you need to know? 

Make informed financial decisions

Knowing your business numbers helps you make informed decisions for your business. For starters, how will you know if your business is making money or losing it? If you know your numbers you can decide if you can afford to make investments or hire a mentor.

But knowing your numbers will also help you know if you’re on track with your business and general financial goals. You can see if you need to increase your prices to cover VAT or to better reflect the value you bring to your customers. 

And if you’re at the stage where you are considering getting someone to invest in your business, you’ll have the numbers to back up why they should consider you a great investment.

See where you’re ...

Which of your products and services make the most money? Is it the one you love to sell? Or is it the one that is really low priced but you sell loads of?

In a business where you offer several different streams of income, you need to know which ones make you money. The ones that take a lot of effort might be making you no money and you need to think about how to generate more money from those that are bestsellers.

To do this, you need to know your cost per product or service.

Service businesses 

In your business, you maybe offer a course, 1:1 coaching, workshops and an ebook as an example. There will be some direct costs (you only incur if you do the work), such as the hire of a venue, or paying a speaker, plus affiliates and associates.

Then there are the indirect costs (overheads). These include, your website charges, social media, VA and so on plus paying yourself. This is everything else, basically, in your business. You need to work out how much this is per hour by taking the tot...

• Employ freelance staff where you can, rather than employ them, until you are sure you can keep them on the payroll permanently.   Employing people can work out cheaper in the long run but only if you can guarantee work.  Freelance can be more flexible.
• Make sure your marketing costs have a sold return on investment (ROI).  For example, if you are going to do Facebook ads, make sure this is factored in when you are looking at how much your offer is.  If you spend thousands on ads and are only selling hundreds in services, it’s not worth it.
• Don’t have anything on automatic renewal and ensure you know what is going out and coming into
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