As always, if you have any particular topics you want me to cover or you want a deeper dive into something, or if you have some numbers related question, please comment or send me a message.
In This Episode:
This one is inspired by all the business owners who worry that they don’t know what they don’t know about numbers. I’ve distilled all this stuff down to a core of 6 topics based on my work with hundreds of business owners. Most of it is not on your Profit and Loss…
I’m going to give you a quick summary of each of these core areas so that you know what it is, why it helps, and what to do about it.
Highlights
[00:07:54] Well, if we just looked at your financial reports, I can help make your business run more efficiently. I can make it more profitable. We can cut some expenses, we can make some changes and things that will increase your revenue, but we can’t make big changes without knowing where you want to go.
[00:01:21] Goal Numbers
[00:09:29] Personal Numbers
[00:14:59] Offer Numbers
[00:16:48] It leads to overwork, burnout, and shutting down the business… or worse. Being stuck, unable to grow, unable to reduce your overwork because you can’t afford to cut your pay.
[00:19:47] Marketing and Sales Numbers
[00:20:25] And the reason why it’s important is because people waste time and resources fixing the wrong thing in the funnel. If you don’t have clarity on each of the different steps of the funnel. You might think you just need to pull more people at the top, and that might be more expensive and less impactful than changing one particular step in the funnel.
[00:24:44] Monthly Numbers
[00:28:35] Future Numbers
Full Transcript:
[00:00:00] Welcome to the Business Numbers podcast. I’m your host, Ben McAdam. I’ve helped over a thousand business owners to grow their businesses and their profits and to get clarity around their business numbers, and I’m recording these episodes to help you too.
[00:00:12] This is the third season of the podcast. Always trying to improve and had a nice break have over a couple of months. As always, if you have any particular topics you want me to cover or you want a deeper dive on something, or if you have some numbers related question, please comment or send me a message.
[00:00:27] Love to cover that in an episode. Enough of that, let’s get into the episode.
[00:00:34] This one is inspired by all the business owners who worry that they don’t know what they don’t know about numbers. Or numbers aren’t their thing and they want to do something about that.
[00:00:43] As your business grows, there are a lot of numbers to keep track of, but there are some key ones to look at. And it’s more than just the profit and loss or income statement. Just like what I do to increase profits is more than just trim a couple of expenses. I’ve distilled all this stuff about numbers down to a core of six topics based on my work with hundreds of business owners.
[00:01:03] In this episode, I’m gonna give you a quick summary of each of these core areas so that you know what it is, why it helps, what to do about it, and I’ll also include some client examples to help people like me who just get ideas better with examples. So let’s go!
[00:01:21] Number One: Goal Numbers.
[00:01:24] This is about goals and plans, and I did a talk last month on this one I might put on the podcast. ..
[00:01:32] Anyway, this area, this topic of goal numbers is a big one. Very impactful. It has a big flow on effect on everything else.
[00:01:42] For example, if you get it wrong you can get dragged around by shiny object syndrome and other people’s scripts about what you should do. You could feel stress, anxiety, and uncertainty about your direction and what to do.
[00:01:57] Sometimes if you do the whole goals and plans thing wrong, it’s like we get a warm feeling like, “oh yes, I have a direction. I’m happy with the way everything is going to go.” But then nothing actually changes.
[00:02:11] Or maybe. , you’ve done this before and you’ve got, you’ve set your goals as like, “One Day! One day I will sell my business for x million dollars !” but one day always seems to be in the distance. It always seems to be two or three years in advance.
[00:02:30] And the ultimate problem, if this is stuff isn’t done right, is that you’ll give up on setting goals give up on trying to achieve what you want to achieve. You’ll just be carried like a leaf on the wind. Saying to yourself that you don’t need to be in charge of your own destiny.
[00:02:50] You might say,” goals aren’t useful. I don’t set goals.” But the thing is, like we all know that setting goals makes it easier to achieve them. In fact, they help you in a number of ways. Like they help you be more focused. If you have a problem with shiny object syndrome, maybe your goals aren’t clear enough.
[00:03:12] Goals also help you arrive in the right place and know that you’re heading in the right direction. Instead of just a warm feeling and nothing changing, you’ll like actually achieve your goals if you get the goal and planning process right.
[00:03:25] Instead of “one day” you’ll have specific dates. Even though sometimes we have to move the goalpost a little, it won’t be this rainbow on the horizon you’re trying to chase.
[00:03:37] And eventually, well ultimately, You’ll set goals, you’ll feel great about making progress towards them, then you’ll achieve them. Then you’ll set new goals!
[00:03:49] And you’ll actually make new progress in your life and your business will get better.
[00:03:54] Sounds pretty cool. And it was cool for one of my clients, Sadie and Jeremy. When we first started working together a couple of years ago, they had a goal of a $10 million exit.
[00:04:12] And it was “one day” in the future. Five years, 10 years. $10 million dollar exit. And we went through some of these things I’m about to tell you. Some of these projects to do for the goals, and went through the process and got really clear on what they wanted. You know, why were they aiming for a $10 million dollar exit?
[00:04:35] It’s because they wanted passive income covering their personal expenses.. In which case they only needed a $3-4 Million Dollar Exit instead of a $10 Million Dollar one… And regardless of what you are aiming for, I think you can understand why getting clearer on their goals, doing the process right, changing that goal post from a $10 million exit to a $3-4 million dollar exit, you can see how that would be more motivating.
[00:05:02] that number’s a lot closer, feels a lot more achievable. No matter what stage you’re at 3-4 million is more achievable than 10 million. And it helped turn around the burn out that they were experiencing. And you know, there were some other things going on in their business.
[00:05:16] They were running at a loss and this process is what actually fixed the loss and got them to a hundred million.
[00:05:22] Not just trimming some numbers, but getting clear on their goals.
[00:05:27] So some of the projects they did, You know, these are the projects to do for the goal numbers topic. It’s basically getting clear, super super clear, on what you want.
Like asking why five times...
I want a $10 million dollar exit…
Why?
Because I never have to wanna work again.
Why?
A $10 million exit because then I’ll never have to never have to work again.
Why?
Oh, because that’s tons of money I could invest it and live off plenty of money.
[00:06:04] You know, just finding it, getting clear on it…. it’s like, “okay, I want to live off passive income, not I want an exit.”
[00:06:10] Now, clearly word the goal. Make your goal S.M.A.R.T.:, specific, measurable action-based, realistic, and time-based, or your own version of the smart acronym. I’ve done a podcast episode, blog post about that before. A clearly worded goals easier to achieve and easier to make plans based on .
[00:06:30] Another project. Get a clear picture of the goal. Like you can calculate any detail you want with the right benchmarks and ratios. Like you can calculate the revenue target, number of customers, number of team members, number of managers, the amount of money you’ll be able to pull out all these kind of things.
[00:06:48] Like you can get a really clear picture of your goal and you can say, yes, I want that future. Or maybe let’s not go down this path. Maybe what I really want is a different goal.
[00:06:59] So it’s helpful to get that clarity. Another project is to get clear on the projects required to get to your end goal, to achieve that clear picture you’ve worked out.
[00:07:10] When you’re clear on these projects, you’ll defeat shiny object syndrome because you can evaluate whether the current project that you’re working on, and have momentum on, is better than the shiny object that someone else you’ve heard is doing. This cool new thing is that gonna work any better than what you’re doing? Nope. Okay. Don’t worry about the new thing.
[00:07:30] And then finally, you need a clear plan. You need to get clear on the plan that lets you get the projects done on time and without overloading anyone, including you.
[00:07:43] So there’s five projects there for goal numbers. Now at this. You might be thinking,” Why are you talking about goals, Mr. Numbers guy? That’s not very numbers based.”
[00:07:54] Well, if we just looked at your financial reports, I can help make your business run more efficiently. I can make it more profitable. We can cut some expenses, we can make some changes and things that will increase your revenue, but we can’t make big changes without knowing where you want to go.
[00:08:15] An analogy here, like you’re, you know, driving a car and the dashboard of the car’s got a bunch of dials and things on it .Shows how well the car is driving, and we can be more efficient with fuel based on that. But if you’re trying to win a race, then maybe instead of focusing on fuel efficient driving, it’s about speed.. It might be the thing that you should be focusing on when you’re looking at the dashboard. Am I going fast enough? Am I accelerating fast enough?
[00:08:51] So without knowing what the ultimate goal is, I’m like, yeah, we can look at a dashboard and yeah, we can maybe tweak some numbers to make ’em better, but we’re not really gonna make great progress. Big progress, fast progress, rapid progress towards what you want without getting clear on your goals.
[00:09:07] As well as, when you clear on your goals, you’ll know which numbers to prioritize and what layout of the dashboard makes the most sense.
[00:09:17] So goals are important. That’s core topic number one of six. It’s the longest one because they’re so important and people don’t do it right and they don’t spend enough time on it. The rest of them are gonna go a bit shorter.
[00:09:29] The second core topic is personal numbers. Again, you know, still not looking at a profit loss yet..
[00:09:37] . Personal numbers, there’s two categories in here.. One is your personal finances and the other is your personal productivity.
[00:09:45] For your personal finances we don’t want your personal finance to drain or hold back the business.
[00:09:51] And a similar thing for your productivity. What you do with your time and how you work during those hours could hold the business back. If you’re too busy fighting fires to work on this new marketing project that’s going to bring in customers a lot faster, well then we need to address that.
[00:10:17] On the personal finance side if you treat the business like your personal atm, then you’ll starve the business… or you could starve the business. Stress and uncertainty about your personal finances is bad in general. I don’t want you to feel stressed about money. That’s an awful feeling, but it can also distract you from the business and your personal finances can put a glass ceiling on your business.
[00:10:46] You can get stuck at a certain income level. You get addicted to a certain personal income level. And you can’t make any changes in the business because you ” can’t afford” to drop the amount the business is paying you. Maybe there’s an opportunity to do some big level up thing, but it will require the business to have a little bit of a dip down from what it’s currently doing in order to grow to the next level.
[00:11:11] but if you are stuck having to withdraw a certain large amount of money out of the business, then you won’t be able to make that big structural change and your business will just kind of tread water at a certain level and decline over time.
[00:11:25] On the personal productivity stuff. Like I said, the business needs the owner to do the important stuff that only the owner can do. So you can’t be too busy on the stuff you can delegate to other people or that can just not be done at all.
[00:11:38] It’s also unpleasant to feel really busy. One of my clients, Cody was spending eight hours a day on Slack. Communicating with his team, answering questions, fighting fires from the team, eight hours a day, six days a week.
[00:11:56] Cody wasn’t able to do the big projects that would move the business forward. And he was miserable in doing that as well. Nobody likes fighting fires for eight hours a day.
[00:12:10] Well, hopefully there’s some people we can pay that can do that, but hopefully it’s not eight hours a day unless your business is really big.
[00:12:17] And so for Cody we made some changes cut down the amount of time he was allowed to be on Slack. He advised the team and he also spent some time changing how they communicate. They have to bring two solutions that they’re considering with any problem and they have to refer to the process before asking him a question. And if the process doesn’t have the answer, then when he does the answer, it goes into the process.
[00:12:43] Like there was a whole bunch of things we went in and it took him down to only one or two hours a day on Slack. And with all that time left he’s happier guy and he’s been able to move a number of big projects forward in the business that have made his life better and helped set it up for success.
[00:13:02] So, what to do about these personal numbers? What are the projects here?
[00:13:05] On the personal finances side, you’ve gotta track your spending, either using software or some manual method, to see what you’re spending on. And then you can trim the unnecessary things. When it comes to being efficient with your expenses and, and trimming them and things, awareness is often the big bottlenecks. There are a lot of things we don’t realize we’re spending money on, especially in this age of the subscription.
[00:13:32] Subscription for software, subscription for Netflix and other streaming services. They’re small amounts we set and forget, and then Forget to use them and forget to stop paying for them.
[00:13:43] So once you track your spending, that’ll highlight those things for you. Then you can trim the unnecessary things and then you will have a clearer picture as well of how much you need from the business.
[00:13:54] And another project is to build up a personal savings buffer so that if stuff happens in the business you’ve got a personal savings buffer to rely on and that will help you sleep at night.
[00:14:04] On the personal productivity side, look at what you’ve been spending your time on.
[00:14:10] You might want to trim some things but once you’ve got a picture about what you’ve actually been spending your time on, you’ll be able to step back and give yourself guidelines to make better decisions when planning what to spend your time on in future. And better decisions in the moment. Like, should I spend my time doing this? Should I put it off? Should I not do it? Should I delegate it?
[00:14:31] After going through your goals, the projects and planning stuff from the goal numbers bit I told you about, you might notice some things that you can stop doing. So you can make room for the projects you’ve identified as important.
[00:14:43] So having your goals and the projects and plan stuff set gives you clarity and empowers you to stop spending your time on some things.
[00:14:55] So that’s number two, personal numbers.
[00:14:59] Number three, offer numbers. So this is about what you’re offering. The service, the product, the coaching program, et cetera, and how much it costs to deliver that thing.
[00:15:13] So for a service, there’s probably some people on your team that do the thing that the clients paid you to do. If your clients pay you to manage their Google ads, then you have some people on your team who manage the Google ads. There’s separate people who do the admin stuff and separate people who work on your marketing.
[00:15:35] If you’ve got a product based business, then the cost of delivery here is shipping materials and products around, getting products manufactured.
[00:15:47] If you’ve got a coaching program, then there may be some people involved in doing the coaching.
[00:15:55] So offer numbers is about what you’re offering, how much it costs to deliver. And it’s important because the ratio between those two things, like how much you’re charging and how much it costs you to do the thing, or provide the thing. The ratio between those two, the margin, limits your rate of growth, and it limits how high you can grow.
[00:16:18] So for example, there’s a lot of marketing agencies that get stuck somewhere between 30 and 50 K a month because the business owner can’t afford to pay other people to do stuff, and the business owner is now run out of time to do any more stuff.
[00:16:31] So without a good margin, you can’t afford to pay a team to help you grow, pay yourself well and avoid burnout. You can’t afford marketing and sales to generate revenue at a higher level if you don’t have enough of a margin here.
[00:16:48] It leads to overwork, burnout, and shutting down the business… or worse. Being stuck, unable to grow, unable to reduce your overwork because you can’t afford to cut your pay.
[00:16:58] Remember what I was talking about in the personal numbers where you can get stuck somewhere if you can’t take less out of the business because your personal finances are outta control? So one of my favorite clients who I helped with about this is a guy named Tommy.
[00:17:15] He and his business partner had Let’s call it a service business, and they were both working really hard and not paying themselves much. And it wasn’t necessarily burning these guys out because they were really good at working hard. But they wanted to pay themselves more and they didn’t know how they could possibly grow their business because they couldn’t physically work any more. They had run out of hours in the day.
[00:17:45] So we had a conversation about thisoffer numbers topic, and I told ‘them about the projects that I’m about to mention to you. And they implemented like rock stars and they pulled out tons of money as their business rapidly grew… and then they sold their business for life changing money.
[00:18:04] It’s a big dramatic shift getting this offer numbers stuff right. I usually call margins or offer numbers, the 80/ 20 of profitability.
[00:18:15] It makes such a big difference and so many people ignore it. They think the answer to earning more money is to just sell more, to increase their revenue. When, if you don’t get this bit right, selling more will actually make you broke and burnt out faster.
[00:18:31] So, Projects around this, what you can do? All of this is around your pricing and the cost to deliver. So the cost of delivering your service, team productivity processes… There’s a lot around improving those costs.
[00:18:45] Product costing for the product based businesses. How much does it cost you to ship your products and raw materials around? How much does it cost to get them manufactured? How much is the fulfillment? All those costs are important.
[00:19:02] If you’ve got a coaching business or a course based business, then what are your costs to deliver? Usually people, if you have people helping you do the delivery.
[00:19:12] So the project’s mainly around costs, improving the costs. It could be changing the inclusions, not just reducing costs. You could change what’s included in your offer. Or
[00:19:23] maybe you need to work on the pricing. Perhaps a price rise might be the project for you to improve this. So that’s offer numbers.
[00:19:34] Quick recap, talked about goal numbers, personal numbers, and offer numbers. That’s the first three done, and there’s no mention of looking at a profit and loss or income statement… yet. We’ll get to that.
[00:19:47] Core topic number four, marketing and sales numbers.
[00:19:52] This is like the numbers and percentages for all of the steps before someone becomes a customer, or before they buy again from you. For example, it could be like your SEO rankings or ad metrics, your website analytics .Maybe you’ve got a call funnel, and you’ve got some metrics through there of who books a call, who shows up, and what percentages.
[00:20:12] Maybe you’ve got like conversion rates for sales calls or on a pricing page or a product page. All sorts of things throughout your sales and marketing funnel.
[00:20:25] And the reason why it’s important is because people waste time and resources fixing the wrong thing in the funnel. If you don’t have clarity on each of the different steps of the funnel. You might think you just need to pull more people at the top, and that might be more expensive and less impactful than changing one particular step in the funnel.
[00:20:48] So, for example, people who have sales calls. All new potential clients go through a sales call. Getting people to show up can make more of a difference than getting more people to visit your website. Or maybe it won’t, you won’t know unless you actually know your numbers. What this leads to is missed revenue opportunities, stalled growth. You might actually conclude your business isn’t worth it and you’ll shut it down and spend time on the others when really all you need to do is get clearer on what you actually had to fix.
[00:21:22] It’s one of the things I notice We all have our preferred areas of strengths, our comfort zones, in a business. Like some people with a marketing background or who have seen success marketing their business or an earlier business, when they’re looking at trying to make their business better, they like go to marketing and like try to put more revenue through the top …when instead maybe something in the operations of the business might need to be fixed.
[00:21:49] Then there’s some other people, some of my favorite clients, In all these types, some people are like very strong in operations when really they need to spend a bit more time and focus on improving the different rates through their marketing and sales.
[00:22:04] So client of mine Forrest hired some appointment setters, people whose job it is to take inbound inquiries or make cold out reach and book appointments that then a salesperson can take the sales call …and it’s a bit of an investment spending money on getting that. And the way to maximize it was to create a spreadsheet tracking certain metrics and looking them at them every day, or at least every week, to make sure that the appointment setters were doing the right things. Or at least, while Forrest was coaching them, he focused on coaching them on the thing that was gonna make the biggest difference.
[00:22:45] Another client of mine, Joe had some sales people. And so each month he would track the. For the sales callit would be the main parts of the funnel. Like how many people went to the site? How many people went to the pricing page? How many people clicked on the link to book a call? How many people actually booked a call? How many people showed up for the call? What was the conversion rate on the call? What was the quality of the lead when the salesperson had a chance to talk to them? And how many people converted on the calls to being clients? How many people converted later? And how many existing clients upsold?
[00:23:22] All those things in a spreadsheet, and benchmarking each of those, made it easy to see that there were a lot of people booking calls, but 5-10% of them were showing up. So made a change that the calls couldn’t be boooked too far in advance, and then suddenly a lot more people are showing up and a lot more sales.
[00:23:43] So following marketing and sales numbers can be pretty impactful. The projects here are basically mapping out your funnel, then reviewing your metrics. Each of those different stages having a dashboard or a spreadsheet or something based on the funnel you mapped out. Having a look at that, at least weekly and taking action on it, which could be coaching team members, it could be making some tweaks to landing pages or follow up emails. It could be starting or ending experiments to test whether something’s gonna make a difference or not. Make sure what you’re doing in your marketing/ sales in the funnel and the dashboard you’ve got aligns with your goals project plan from the first section.
[00:24:31] And also here a project might be looking at churn. Depending on your business you might look at it in this section or you might look at it when you’re looking at core topic number five. Your monthly numbers.
[00:24:44] This is the bit where we crack out the profit and loss or the income statement. These are the financial reports. Reviewing the financial statements at least monthly. That’s why we’re calling it monthly numbers.
[00:24:55] But it’s not just the profit and loss or the income statement depending on what it’s called where you are in the world, or what your software calls it. You also need to look at the balance sheet.
[00:25:05] The balance sheet is something slightly different. The profit and loss shows you your income, expenses, and hopefully the difference between them is a profit, not a loss. Whereas a balance sheet is more like a snapshot of your wealth. How much you have in assets, like money in bank accounts. How much you have in liabilities, like credit card debt, or loans, or tax payments you need to make. And then hopefully the difference between your assets and liabilities there’s some equity there.
[00:25:38] It’s kind of like if you own a house, the assets, that’s the value of the house. The liability would be the value of the mortgage, and hopefully there’s some positive equity there. If there’s no positive equity in business that’s like emergency stations! We make some big changes. Because if anything goes wrong, you don’t have enough assets to pay off your debts in a hurry.
[00:26:02] Looking at these monthly numbers, your Profit and Loss, your financial statements, whatever…. this was a lot of what people think when talking about the numbers. But notice it’s number five of six of the core topics, because the other topics often produce bigger wins, and they’re not things that most people immediately think about it comes to numbers.
[00:26:25] The reason why it’s important to have a look at these numbers is cuz of the busyness of business can make it hard to see what’s going on. It’s easier when you take a moment to step back once a month, or more frequently even, to step back and look at the objective numbers that tell you what’s actually happening. Especially as your business gets bigger you need these ways to see what’s going on.
[00:26:48] So, Some examples from some of my clients… josh we identified a hundred thousand dollars a year in cost savings on some software they were paying for for their clients, but the most of the clients weren’t actually using it. Josh and some other clients, Ryan and John and Joe getting their ops managers or senior managers to increase their margins, like the offer numbers I was talking about, to improve that, and to reduce expenses. By giving their senior managers, their ops managers, access to the financial reports or pieces of it they were able to look at it, find what could be changed, make the changes, and then see the results of it.
[00:27:32] Some projects here for monthly numbers might need to change the layout of some of the things on the profit and loss and balance sheets, so it’s easier to see what’s most important for your business to be keeping an eye on.
[00:27:46] You set up a monthly review with certain things that you look at and certain questions you would answer once you’ve looked at the numbers and got the context.
[00:27:56] Another project ,we would talk about how to quickly check for bookkeeping errors so you don’t make decisions on bad data. And what are the key numbers that you look at? And what to do about the numbers?
[00:28:09] These are all the projects for monthly numbers. It isn’t just like sitting down with your account or bookkeeper, you look at a report, they say, “Hmm, this has changed. This has changed. Look at these ratios. Hmm.” And then that’s it and you just sit there in confusion. You can use these things to tell you what’s going on in your business and improve it. But as amazing as monthly numbers are, they’re limited to the past.
[00:28:35] Let’s talk about the sixth core area here, which is future numbers.
[00:28:40] A lot of these sections have been about looking at the past and deciding what to do differently. Then, some time passes and you review the new past. Like a lot of these numbers topics I’ve been talking about are are past focused, but now we wanna look further into the future and see issues many months in advance. Especially when we’re gonna make some commitments like hiring.
[00:29:04] You might be able to afford to hire someone now, but not necessarily later. Maybe you’re going through a period of growth or you’re going through the peak part of your yearly season. You find you sign up a lot of clients in December, or you have a lot of revenue come in in March from product sales for example. And you’re like,” ah! It looks like I can afford to hire someone”, but can you in the quiet period? You don’t know and that can stop you from pulling the trigger on a hire that can really help the growth of your business.
[00:29:40] So we need a way to look into the future and see problems months in advance. That will give you time for coming up with better solutions. So if you find out that things are gonna go badly in the Quiet season six months from now, you can make some changes like cutting down your team’s hours or firing some team members, but giving them time to find a great job.
[00:30:06] Future numbers also give you confidence about the future, which makes for a less stressful business owner. Which is always good cuz then we make better decisions as well as just enjoy life.
[00:30:17] Future numbers also help you test the effect of your plans on your future cash. Make sure your great new strategy isn’t gonna compromise the business.
[00:30:25] One of my clients, Jeff, found this particularly helpful because he hired a couple of rock stars and he paid above market rate for them and they’ve done some amazing things in the business and helped him step back from certain things and be the business owner he wants to be, as well as implement some big projects to help the business grow. But he didn’t have the confidence to do it without a way to look into the future and make sure he wasn’t gonna go broke or the business wasn’t gonna go broke, making this big move. It also helped decide whether he could fire or downgrade some of the existing team members.
[00:31:05] He could then factor that into his calculations of the future about how affordable these rock stars were. So it makes a big difference.
[00:31:13] The projects here, there’s three levels that you can do this on.
[00:31:17] There’s a micro cash flow where like, oh my god, cash is a bit tight for the next couple of weeks. And so you would list out all the money coming in, going out and see at any point there are we gonna go broke? If so, could we put off some money going out? Put it off to a later time? Can we bring forward when the money’s gonna come in? Can we get it in sooner? So that’s a micro cash flow.
[00:31:39] Then there’s like a cash flow projection, which is where you can see the cash coming in and going out of the business months into the future. Six or twelve months into the future. You can predict your future bank balance and you can confidently know, “okay, we’re not gonna go broke.”
[00:31:55] Especially, you can use this cash flow projection to run a “what if” scenario. Like “what if I hired someone? Do we go broke?” “What if I hired someone and put some money behind this hire?” Like maybe you’re getting some marketing coaching and they’re gonna suggest you spend more on ads. Can you do both of those things without going broke? Even if that marketing, coaching and ad spend doesn’t increase the revenue and doesn’t pay for itself. Are you gonna be okay in that worst case scenario?
[00:32:23] So the final level… micro cash flow, there’s a cash flow projection… the next one is you can like fully expand the cash flow projections, so it’s more than just the cash in and out. It could be the marketing and sales metrics that lead to the cash in from customers. So you can set KPIs for your team or your department managers and run best case, worst case, expected case scenarios, plan, hiring, all that kind of stuff. So you can go really high level really, really detailed with this and focus on growing your business more aggressively because you know you’re not gonna go broke with these things.
[00:32:59] So that’s the six categories .The six different core topics of numbers. I’ve gone through all six of them at a high level and given you and idea of some projects.
[00:33:07] So now that you’ve listened to all that, which do you most need to work on? Is it number one, goal numbers? To help you focus on the right projects to get you efficiently to where you want to go.
[00:33:18] Is it number two, personal numbers? Like your personal finances and personal productivity for the business’ most important asset.. That’s you.
[00:33:25] Number three, offer numbers? Which is about your price and the cost to deliver what you sold, and the critical ratio between them.
[00:33:32] Do you need to work on number four, marketing and sales numbers? Fixing the right things in your funnel.
[00:33:38] Is it number five, monthly numbers? Reviewing your financial reports for a high level viewpoint and maybe some trimming of expenses.
[00:33:47] Is it number six, future numbers? So you can have confidence about the future because you can see problems in advance. Or go next level and flesh out full KPIs for your team and see the effects if they hit them, or miss them a little, or exceed them.
[00:34:01] One to 3, 4, 5, 6. Which one is it? I’d love to hear. Let me know. Comment, message. Reply to this email. Get in touch.
[00:34:09] Like I said, these have led to success for my clients. All of these projects, all of these core areas, or some combination of them depending on the particular client.
[00:34:19] And what I’ve been doing over my break over the last couple of months, (which is amazing, I hardly recommend a break) is I’ve designed a new program to help business owners implement these projects. And there’s also some bonus projects in there for quick return on investment and some extras for those who want to level up.
[00:34:35] This program is gonna help them use their numbers for growth and growing profits instead of being afraid, burying their head in the sand, not spotting the key problem to fix because they’re missing the different viewpoint.
[00:34:45] And I’m looking for a few business owners to get some extra hands on help implementing these projects before I turn the program into a course or get other coaches involved or something.
[00:34:55] If you want help with any of this, or the program sounds like something that could help you, send me a message or go to www.profitscollective.com and book a quick chat.
[00:35:06] With all that said, I hope this episode was helpful. There was a lot here. If you identify there’s some projects that you need to work on reach out for help or let me know and I’ll do a podcast episode with a bit more detail on them.
[00:35:20] As always yeah, hope this was helpful, and thank you for listening.
[00:35:26] Thanks for listening. If this was helpful please subscribe, follow, rate, like, share, comment… all the things.
[00:35:33] Show notes are at www.Profits collective.com/podcast or www.businessnumberspodcast.com.
[00:35:40] If you want some help with growth, profits, and clarity around your numbers, go to www.profitscollective.com for more resources or to book a quick chat about working together.
