Janine Allis from Shark Tank and Boost Juice fame recently provided her three tips for success on a video issued ahead of season three of Shark Tank.
Her three tips were:
- Persistence and the ability to never give up.
- People with high standards who will make your business even better.
- Know your numbers.
In fact, Janine says what I’ve been saying all along, and I quote:
“Understand that you don’t have to be an accountant, you don’t have to be the biggest expert in the business but understand how your business ticks and you will have the business that is successful.”
As a business owner, it is vital to have enough knowledge to read and interpret your financial reports, to know what the key metrics are in your business and how to use the historical information in your financial records to project and plan for the future.
Having accurate figures in a timely manner is essential to making informed decisions. It’s no good looking at your past months’ figures when you’re already in the third week of the next month. You need to be reviewing your previous months’ numbers within 10 days of the end of the month.
And yes, I absolutely advocate looking at your figures on a monthly basis. If you wait until the end of the quarter when the BAS is completed to look at the numbers to find the good, bad and the ugly within them, the problem areas will have continued throughout the period making the situation worse.
Janine Allis has also written about when she started in business how she got an expert to show her how to use an accounting system and then she did the invoicing, paid the bills, paid the wages and so on herself. She talks about how the knowledge she gained from doing that provided her with the knowledge she uses to this day within her business.
When I’m talking about knowing your numbers, I’m not just talking about the financial numbers.
Numbers run through every aspect of a business. Consider the numbers that relate to your sales and marketing. Numbers like the return on your marketing dollars, the number of leads or enquiries, the number of sales and the list goes on. Looking at the operational side of the business, there are numbers there too like productivity, efficiencies, the number of jobs or projects, downtime etc. And within every other aspect of the business, there are more numbers.
When I’m working with clients one-on-one in my CFO role, we’re delving into the details of the numbers of every aspect of the business and looking for ways to improve them. Each business is different and the key numbers to focus on will be different depending on the stage in the business cycle as well as the type of business.
Remember, numbers run through your business whether you like it or not, and you don’t need to be a maths wiz to understand them. Fundamentally accounting numbers are mostly adding and subtracting with a few multiplication and divisions thrown in.
So take Janine Allis’ advice and mine too and take the time to know your numbers.