When relying on the sales number is just not enough

After working with business owners for over 20 years now, it still surprises me how many don’t even know of the hidden gems that can be found in the financial information in their business.  You see, financial information goes well beyond just understanding whether you have made a sale.  The “slap in the face” truth of it is that sales information is generally historic by the time a business owner sees it or is made aware of it, it’s happened, it’s done.  And for some, it’s the only financial reporting they care enough to focus on.

Sounds far-fetched?  Guess again … You see, it’s in our nature as business owners to be driven primarily by the sales numbers of our businesses, and whilst I can respect that this is such a significant number, and with the right amount of attention to it, it can impact a business positively … it has no significance unless measured against other numbers in our business. 

Did you know that a sales number can be smaller than last year’s number and yet return a profit? And worse still, it can be greater but return a loss to your business?  A sales number reviewed against slow selling stock assets can prove to be less than desirable even if it’s greater than it was the same time last year?  Given any thought to the impact a sales number has against the rising value of customer debts in your business?  All of which are really valid questions you should be challenging in your business regularly.

Here’s the kicker … you won’t know this, unless you capture it appropriately, against other numbers like expenses, or assets, or gross profits or if you don’t have a Profit and Loss Statement that is accurate and prepared in a timely manner to even shed light on this outcome in enough time to make a positive change.   Without that, how the hell are you making appropriate business decisions?

The bottom line is … you simply have to care enough to want this information.  Because the reality is, it’s already at your fingertips, whether you have a dedicated financial representative, an online financial package, a simple excel spreadsheet, or even nothing official …  you have it, all of it, already … it’s the one thing that sets a successful business apart from one that’s not.  Which are you?