In This Episode:
Ben explains some of the benefits of understanding the fifth of the six core areas (the area most people think of when they think about looking at their numbers).
Show Notes:
Curious How Ben Could Help You?
Full Transcript:
[00:00:00] This is the fifth of the sixth core areas in your numbers for a good reason. It’s the area most people think of when they think about looking at their numbers, but usually, they need to work on the other core areas first. That’s been true for every member of my new program as well as for my one-on-one clients, even the ones that come to me specifically for this core area.
[00:00:21] I’m talking about Monthly Numbers… or looking at your financials each month.
[00:00:27] Welcome to the Business Numbers Podcast. I’m your host, Ben McAdam. I’ve helped over a thousand business owners with growth, profits, and clarity around their numbers, and I created this podcast to help you with that too.
[00:00:41] This is the fifth of the sixth core areas in your numbers for a good reason. It’s the area most people think of when they think about looking at their numbers, but usually, they need to work on the other core areas first.
It’s the area most people think of when they think about looking at their numbers, but usually, they need to work on the other core areas first.
[00:00:53] That’s been true for every member of my new program, as well as for my one-on-one clients, even the ones that come to me specifically for this core area.
[00:01:02] I’m talking about Monthly Numbers, or looking at your financials each month.
[00:01:09] Let me tell you about one of my favorite clients, Josh. He’s a really generous human being with his own expertise to share, so I might interview him on the podcast later this year.
[00:01:18] I’m thinking of having guests. If there’s anyone you think I should interview to talk with about numbers, then let me know.
[00:01:25] So Josh and his business partner were busy running their mid-seven-figure agency. They try to remember to look at their financial numbers each month, but there’s always a distraction in business. And even when they did remember, they didn’t really know what to look for.
[00:01:39] So we looked at their numbers each month, and I taught them how to do it themselves, and their operations manager was on the call, so I taught him as well, and it became his responsibility to improve the third core area, Offer Numbers, and he ran a successful price rise project, it was also his responsibility to keep expenses lean.
[00:02:00] So it doesn’t have to be you doing all of this stuff that I teach. You can get your team involved as well. And that’s a feature of the program is that the team can get involved, they can jump on the office hours, all that kind of stuff.
[00:02:12] But anyway, back to Josh. With the new understanding and the monthly discussion at the management level in the business, they were able to add an extra $160K a year in profit fairly quickly. All because they looked at the numbers, knew what they were looking for, and knew what it meant.
[00:02:30] Most business owners are like Josh and his partner, and maybe you are too. Maybe your accountant has told you to look at the numbers, but either they didn’t help you with it, or they said a lot of jargon that didn’t help you grow your business. My approach is different, though I can speak accountant language if needed.
With the new understanding and the monthly discussion at the management level in the business, they were able to add an extra $160K a year in profit fairly quickly.
[00:02:48] With monthly numbers, we can answer the “What do my numbers mean?” question, and also make looking at your numbers a profitable activity.
[00:02:56] Without a grip on your numbers each month…
- You’ll be worried about what you don’t know.
- You’ll be uncertain about your numbers and how the business is doing.
- You’ll get stuck in the day-to-day and miss the forest for the trees,
- and maybe miss something critical that kills the business.
[00:03:12] If you know your financial numbers and you’ll look at them each month…
- You’ll have peace of mind, even though your business is growing more complex.
- You’ll have clarity and focus.
- You’ll feel in control of the high level and the detail.
- And feel like you have the information to make the right strategic moves and be a competent financial steward of your business.
[00:03:33] Before we talk about how to work on all this stuff, if you haven’t heard yet, I’m on Twitter. Follow me @McAdamBen for bite-size tips throughout your week.
[00:03:47] So here’s how we work on monthly numbers with my one-on-one clients and in the program.
[00:03:53] There are four key things I wanna share with you.
[00:03:56] 1) Helpful Layout:
Your financial reports and bookkeeping are more helpful to you when they’re set up in a way that suits a business owner rather than your tax department or the default layout that came with your bookkeeping software. A few common tweaks usually make a huge difference, making it easy to read, easy to understand, and more pleasant and useful. So you’re less likely to put off looking at it.
Your financial reports and bookkeeping are more helpful to you when they’re set up in a way that suits a business owner rather than your tax department or the default layout that came with your bookkeeping software.
[00:04:24] 2) Know the Reports:
Before knowing the numbers on the reports and what they mean about your business, it helps to know what the statements are and what they’re for. But just a quick overview, you’re not supposed to be an accountant or a bookkeeper, but a little context can make a big difference.
[00:04:43] So, that’s helpful layout… knowing the reports.
[00:04:45] 3) Check the Bookkeeping:
Again, you’re not supposed to be an accountant or a bookkeeper, but it’s hard to make good business decisions using bad numbers. And it doesn’t really take long to check. It’s not very complicated. I was just telling one of the members of the program, yesterday actually, that for him, it’ll probably only take five minutes to look at his numbers, including checking that bookkeeping’s done, and then he can spend however long he likes after that thinking about what the numbers mean and what he’s gonna do about it.
[00:05:20] 4) Review the Key Numbers.
So I’ve talked about helpful layout, knowing what the reports are, checking the bookkeeping, and now we’re actually reviewing the key numbers as the fourth point.
[00:05:30] You should be reviewing them at least monthly, if not more frequently. It’s not as complex or mysterious as most business owners think, and the benefits can be huge, like for Josh, $160K a year. That’s a pretty good profit result.
[00:05:45] I’ve recorded a couple of other podcasts and done a few workshops for other people about what those key numbers are, so I’m not gonna go into them here. I just want to get you thinking about what you are doing with your financial numbers and to try and hopefully get the idea across that it doesn’t have to be complicated. It doesn’t have to be boring. It can be useful.
So, a question for you. Do you review your financial numbers every month, and do you know what the reports are for and what the numbers mean?
[00:06:12] So, a question for you. Do you review your financial numbers every month, and do you know what the reports are for and what the numbers mean?
[00:06:20] If the answer is no, this could be a very profitable thing to work on, and it’s not particularly complicated.
[00:06:31]Hopefully, that helps and gets a few more of you to have a look at your monthly numbers. Even though yes, I agree, it’s not the most exciting thing… but it is! Once you’ve had a few good results from it, or you’ve used it to dodge a bullet and fix something you otherwise wouldn’t have noticed in your business. Then it becomes more of a priority to look at every month once you’ve had that experience.
[00:06:58] So that’s all I wanted to cover today, another short episode. Hope this helps. Reach out and let me know. Otherwise, I’ll see you in the next one!
[00:07:08] Thanks for listening.
[00:07:09] Thanks for listening. If this was helpful, please Subscribe, Follow, Rate, Like, Share, Comment… All the things.
[00:07:17] Show notes are at profitscollective.com/podcast or businessnumberspodcast.com.
If you want some help with growth, profits, and clarity around your numbers, go to profitscollective.com for more resources, or to book a quick chat about working together.
