Getting a Grip on Your Numbers is the only way to pull your head out of the sand and see your business in a true light.
How many times have you thought,” I’m not a numbers person” and “my Bookkeeper/ Accountant take care of that for me!”
Understanding your numbers gives you greater insight and brings a better sense of awareness to your business and how it operates on daily basis.
Breaking down each of your drivers, will show areas that require improvement. It is basically working out where the holes are in your “Financial Bucket” and understanding how each of them can be improved.
What are my Drivers?
Each business has their own version of Daniel Ricciardo. The elements that position your business to be either driving straight and fast, or like you have not achieved your Learners Permit, wobbly and with no sense of direction.
There are 7 key Drivers
- Debtors – how long does it take your clients to pay?
- Creditors – how long do you take to pay your suppliers
- Stock – how many days of stock are you holding before your products sell (Cash tied up in inventory)
- C.O.G.S – What is your inventory costing you?
- Overheads – both fixed and variable
- Price change percentage – Margins, discounts given, or competitor pricing can affect sales
- Increasing Sales – requires additional funding for labour and stock
Is there light at the end of the Tunnel?
Of course, there is! Your business will operate with renewed focus when you have:
- A plan of action – when you analyse your sales and how you can make improvements to your bottom line without increasing customer base
- Your staff will operate well when they have specific targets to achieve. Knowledge brings awareness
- The time to work on your business, rather than in it. New opportunities will present themselves when you think clearly, and you can plan for a brighter future.