Know Your Numbers

I was recently watching a video of a speech given by Marcus Lemonis, known for his appearances on CNBC’s, The Profit.  In this show, Lemonis assists companies who are struggling and need help,  often putting his own money into the business.  If you have watched any of the episodes of The Profit, you know that Lemonis has very little tolerance for a company leader who does not know his numbers.  In my work with business owners, I have found that many owners were so busy growing their company, that they did not have a clear knowledge of their basic numbers.   This is really amazing considering how much of their time and life savings they have poured into the business.  There have been times when I have been called  to assist a company in trouble only to discover I am way too late in the process to effectively assist the owner from financial disaster.   What is sad about these situations is that if the owner had know key numbers about the business in a timely fashion, corrective action and assistance could have been started sooner and the company turned around to profitability and positive cash flow.  Though every company is unique and key numbers vary by each business, there are certain basic financial numbers that every owner should know every month as follows:

• Monthly Profit/Loss
• Year-to-Date Profit/Loss
• Projected Profit/Loss
• Monthly Sales
• Year-to-Date Sales
• Projected Sales
• Monthly Cash Flow
• Projected Cash Flow
• Monthly Gross Margin
• Year-to-Date Gross Margin
• Projected Gross Margin

The above numbers are only the basics, a deeper dive is necessary to really understand and continually improve the company and beat the competition.

Do not operate your company in ignorance, know your key numbers!
photo credit: Numeri via photopin (license)