A large portion of my clients come to me because they’ve been hiding from the numbers in one form or another. They know they’re important but they’ve been avoiding them. Maybe they’re a bit busy, maybe the numbers make them uncomfortable, maybe they had a horrible maths teacher in school, any of those reasons.
But something’s changed, and that’s why they’ve come to see me. Maybe the revenue has jumped up, for example. And because something has changed, they’ve decided it’s time to get serious about this. They don’t want their business to suffer from something that they didn’t know that they didn’t know (“unknown unknowns” I think I’ve heard it called before).
I’ve got a whole module on this in my Profit Foundations course. But I’m here to teach you the key concept, so you can get some clarity and get started.
The key here is we want a system. We want a system, something that just keeps happening regularly, over and over and over again, without any fuss or taking any of your brainpower.
On that note, we want you out of as many parts of this system as we can! Just keep you in the important parts. If you’re one of those people that avoids the numbers, or this is a low priority, or you are really busy, then you know at least the system will keep running without you.
There are three main components to this process…
1st Component: Data Entry
Information comes from somewhere, and then it needs to be entered into somewhere else.
Some businesses are lucky; there’s some software they use where the information is entered by the customers when they book or they make a sale. But for most businesses, there’s some element of collating information from a few sources, even if it’s just from your bank account.
Ideally for this step, we want it done by NOT YOU! And this is so important. What you want is a bookkeeper or an admin assistant. Some people have the partners do it, some people have friends or relatives. But this is NOT YOU! doing it. Very important!
I’m not necessarily talking here about data entry into an accounting system, it could be a spreadsheet. I would prefer it to be something that’s on a piece of technology, not on a piece of paper, because usually technology means things are faster, accurate and cheaper to do.
2nd Component: Reports
After the data entry has been done, there are reports. Data entry happens into a system and then that system can generate a report.
Usually, the person who does the report is also – you guessed it – NOT YOU!
I know that if you’re starting in business, you might be thinking, “oh god, I don’t want to pay someone to do that”. But you can get people really cheap, say $5 to $10 an hour, and they can do all sorts of things for you.
3rd Component: Review
Once the reports are done, now we want somebody to have a look at those reports, analysing the reports and making decisions based on those reports.
The numbers in your business can be really useful for making decisions. I’ll talk more about that in a separate video. The important part is that you’re not just analysing them and saying, “that’s interesting”, you are actually taking some sort of action for it.
And this component is done by YOU! You are allowed a little bit of help obviously, that’s what I do.
4th Component: Feedback
Then the one other piece that completes this picture is (after you’ve done the analysis), you might have some feedback to earlier parts of the system.
For example, on the data entry, maybe they made some mistakes, or maybe you want to lay out the reports a bit different, so you need to tell the data entry person about that.
Feedback is the last piece of the system.
To summarise this system that will help make your numbers less of a scary mess:
- Data entry – Not You!
- Generating reports – Not You!
- The key important piece is Analysis and the Decision Making – YOU!
- Feedback to improve the earlier stages.
You are allowed to have some help. The important thing is that all the data entry and all the reports are done for you on a regular basis, so that you can sit down once a week, once a month or whatever your cadence is, and say, “there’s the numbers that I wanted, in a format that is useful for me, and I can make actionable decisions”.
Want to hear more on this topic of systems to make your numbers less of a scary mess? Comment ‘more’ and I’ll put more videos and posts together for you.