Often a creative business owner does not see themselves as a numbers person so shy away from grappling the figures in their business. In this blog, Catherine Erdly runs through the top reasons that you need to get comfortable with the numbers in your business.
Everyone has their inclinations, some of us are more creatively driven while others enjoy more analytical subjects, or you might be somewhere in between. Whatever your preference, even if you do you not consider yourself to be a numbers person, it is important to know your companies numbers in order to be able to continue doing what you love, successfully.
It’s important to know your numbers such as your sales goal, your break-even point, your profit margin and your projected cash flow. Numbers are important in shedding light on how well your business is performing for these following reasons:
Being aware of your numbers allows you to be more clear about where your business is going. It is important to be aware of how your progress looks from a financial perspective. SOmetimes you may think you are doing well but numbers might not support it, or you may just need to be more aware of how well you are doing.
Having numbers to support your growth allows you to better visualise what is happening and quantify it. This will in turn allow you some peace of mind knowing exactly what is happening with your business rather than having a rough idea of it.
Once you are aware of your numbers you can plan better financially. Being conscious of how much you are spending and how much money is going in allows you to be informed in your decisions on what you can and cannot afford to pay out in your business.
FInancial planning based on the real life results of your decisions is important. You may think that something is a good idea but in practice it does not yield the type of outcome you were hoping for. You cannot properly check how well those decisions are without the maths behind your product or services performance.
Once you know how you are currently doing and how you’ve done in the past you can begin to assume patterns and plan for the future better with those patterns in mind.
Statistics and numbers allow you to make realistic predictions about where your sales are going and allow you to work around that. Numbers can also be presented in a more consumable way using graphs that can clarify a lot of issues that do not seem clear without it.
Predictions then allow you to create a plan based on real numbers and outcomes. Even if you do not get your sales forecast right you can adjust it as necessary and move forwards in a more organised way, instead of guessing based off of no solid information.
A framework also then allows you to compare your goals with results that can allow you to see not just if you are reaching your targets, but how much you are under or over performing with accuracy.
Once you are in the loop of how things are going you can feel more in control and see the real results of changes and decisions you make within your business. You can feel like you are running your business, not that your business is running you.
Numbers may seem like a daunting task, but once you implement maths into your business a lot of other issues disappear, and you are able to run far more smoothly. It is not an easy thing to do and takes a lot of work and getting used to, but your business will be all the better for it.
Want to know more about how to cut through the overwhelm, get clear on your strategy and take your product business where you want it to go? Join Catherine’s FB group Female Founders In Retail to get encouragement and support, as well as weekly tips.
Catherine is the founder of Future Retail Consulting and is on a mission to help people create the life they want by growing successful product-based businesses. She helps them make money by developing a clear strategy focused on their product offering, their pricing, and their sales channels.
Catherine brings nearly twenty years of industry expertise and an inspiring passion for product businesses.