It is true that as a business owner you have to be spinning every plate in the business constantly. You will have one plate termed Marketing, one termed Finance, one termed sales, and even one termed cleaner.
You end up being all things to all people. I know that looking at the books and working out your financial position is the job that most business owners hate doing. Either because it’s depressing or because it is just too much like hard work and I am an ideas person.
When you are thinking about business growth through the numbers is critical. Whenever we train any business about business growth. We always consider the numbers as the power to grow is often contained in those details. So what should you be looking at, and how do you get to it?
What you need to know about cashflow
Have you ever heard the phrase;
Businesses don’t die because of lack of sales but because of lack of cash.
That saying is very true. When looking to grow any business, cashflow is King. The cashflow in your business monitored on a daily, weekly, monthly and then on a predictive annual basis. This gives you the best idea of what is and what should be happening in your business.
Cashflow, as you will know if you are running a business, is worked out by a straightforward calculation of sales minus costs. This gives you a true cash position in the business but also the tools of projection to work out where the business will be in the future. This is critical when you are looking to grow; you must know what you will have enough money to grow and sustain your business while you grow.
Net profit is the second growth tool in your arsenal to know if growth is right for you at the moment. Net profit is a good indicator of whether your business is making or losing money. Should you be growing? Or should you be consolidating the work you have currently to make sure you have some level of business sustainability?
What you need to know about sales
Generating sales is the reason most of us operate any businesses. It is important to keep a close watch on sales, as a dip could be a warning sign of trouble.
It can also be said that if sales are up, this also should be watched as well if you are looking to grow your business. If the business is especially good, will it mean growth? You will overcommit yourself and be unable to service any contract or sales levels?
Finally knowing your figures can help you work in several areas of the business from a marketing perspective. Keeping a record of the number of leads and the conversion rates coming into your business can help you develop and identify the areas of marketing any business should be considering when looking to grow.
- must be approached as a disciplined process – do not enter into it on a whim, it should be planned and well researched.
- should be planned comprehensively and must include an organised, systematic and continual search for new opportunities.
- is usually customer centred and must take into account the whole organisation and all staff.
Innovate or die – mist companies need to adapt to a changing world – to grow the businesses need to change and develop. Keep your eyes open to new opportunity and with a structured plan make the leap.