Carmel Seery helps business owners keep more of the money they make by knowing their numbers.
We caught up with Carmel at #kickstart-dublin and asked her what numbers are most important to track, how knowing the numbers helps us make better business decisions, and the easiest way to make an actual impact on those business numbers.
Find Carmel at CarmelSeery.com
Regardless of the size of the business: cash is king.
Many a profitable business has gone out of business because they have run out of cash. So have some form of cash management system. It can be on the back of an envelope; I really don’t care, as long as you understand it and you know the numbers: you know what’s coming in and going out of your bank account, and how to plan forward.
As entrepreneurs, there’s an anxiety that comes around the numbers and around cash. But the longer you forecast and plan your cash spending and your cash income, the more you can see gaps that are coming. And seeing a gap three and four months out takes the anxiety out of it, because you can do something about it and plan. You can know when you’re going to be cash rich; then you can buy some assets that maybe you’re looking at.
It really is key to how successful and how relaxed you are in your business.
Often when you’re working in your business, and certainly if you’re a one person show, you’re wearing many different hats. Whatever it is that is making the most noise in your business tends to be where your attention goes.
The problem with numbers is: because they don’t present themselves as being urgent, they tend to get forgotten about.
So customers that are maybe on the phone more to you, or they have bought the biggest product—the biggest one-time cash influx—in your mind you tend to think that customer is your biggest customer.
But once you know the numbers, you can see where the easy money is coming in.
A customer that is quite demanding gets your attention, but they could be costing you a lot of money. If you’re offering different services or different products, sometimes the lower ticket items tend to be the first things to go–but if you’re spending less time on them, it could be a good reason for you to keep them.
So knowing your numbers helps you make better decisions–and once you have all of the information, you can make the right decision for your business and your strategy.
The easiest way to impact your numbers is by doing it bit by bit. I can’t stress that enough.
A lot of people look at the whole elephant and wonder how they’re going to eat it, but it’s really bit by bit and taking small bites of your numbers: keeping records, looking at your bank account.
Carve out at least an hour a week just to have a look at your bank account and update any reports that you have. Try and get it out of your head. We have everything running around in our heads—we know that this customer owes us money, and we know we owe that supplier money—but there is more impact when you see it in writing. And while it’s in your head, you’re not really doing anything about it; it’s just causing you anxiety.
So get it out of your head, onto paper—again, the back of an envelope, an Excel spreadsheet, or an accounting package, whatever works for you.
Carmel Seery @hello8
I help business owners keep more of their numbers by using their numbers.