Sounds like a simple enough question, but I continually meet business people who don’t know if they are making or losing money. And I view this question as merely a big picture question. I want my clients to know how much they make on each latte, widget, contract, etc. But I’ll save that for another post.
This question is one that should be asked regularly by business owners or their coaches. When an owner knows the current financial health of his business, he can proceed with confidence towards the goals that he’s set. When the answer is unknown there are some unfortunate outcomes:
1) You think you’re doing great but actually are in deep trouble. You proceed with expansion plans only to have the bank pull the plug “unexpectedly”.
2) You think you’re doing poorly because you’ve heard that the economy stinks when in reality you are doing quite well. You miss out on opportunities that would have propelled your business far beyond your goals.
So, if any of the following statements are true:
1) You have no idea how your business is doing.
2) You’re afraid of your financial statements.
3) You think your banker is the enemy.
4) You screen all of your calls.
5) You think the accounting department or bookkeeper are always full of bad news.
….maybe you need someone to walk you through your financial statements and show you how to be able to answer this question. Once you’ve learned what to do with the financial statements you’ll come to the point where you no longer fear them or are surprised by them. You will develop the ability to know instinctively whether at the present moment you are making or losing money.
When you arrive at this point, your will be able to take your business to your goals and beyond.
