20 Oct YOUR BUSINESS NUMBERS: YOU KNOW THEM OR YOU DON’T
When it comes to running a business, most people are overlooking their number-one biggest asset.
Advertising, marketing, social media, and multiple others are a drop in the bucket compared to the power of your numbers. If I have said it once, I have said it a million times “knowledge is power”. Your business is only as strong as the knowledge you have about your numbers.
No matter what stage of life your business is in, your numbers are the most valuable assets you have on your quest to help your business thrive and grow. When you really understand the value of this asset, only then will you be happy to invest your time, energy and budget to acquire and develop them correctly.
In this blog post, I’m going to highlight two fundamental ways to obtain the required numbers to make informed management decisions.
Basic Business Numbers: Quality over Quantity
When working with numbers quantity is not always best. Getting a dozen different reports that you never look at, can be overwhelming. Construct a workflow and reports that work for you – develop and use the reports that you need.
The best place to start is at the beginning – Balance Sheet and Income Statement. Every business has them, not everyone looks at them, but every business has them. Know your numbers – work your numbers – utilize your numbers – own your numbers; they are your numbers.
What can these numbers do for you? They provide you with everything from, in accounting terms, from your assets to your liabilities to your income to your expenses and everything in-between. Or in other words everything you own, owe, made and paid.
Advanced Business Numbers: Labor Costs are Key
Costs are critical; they can make or break a business. If costs are not known or controlled they can take on a life of their own within a business. A hundred dollars here or a dollar there can drain a businesses’ net profit before you even know what happened.
As stated above the best place to start is at the beginning – costs for (a service oriented business) your parts, materials, and labor. Are you making money or losing money?
Costs for your parts and materials are easy to acquire and work. Verify from your vendor invoice how much the item cost you, how much of a mark-up do you want to make…use your numbers.
Labor on the other hand can be extremely difficult to obtain – where do you start, what do you include, what do you exclude, where do the numbers come from. We have created the Apex eSuite Burdened Labor Costing program to answer those questions for you and give you your Burdened Labor Cost for each individual direct employee, using your numbers.
This is not something that you can do overnight. It takes a little bit of time to build the processes, procedures, workflows, and reports. But it is definitely worth the effort.Try Our Burdened Labor Costing Tool