Learn to speak the language of business.
Are You Driving Blind?
Not paying attention to your key financial numbers is like covering up your car’s dashboard before going on a road trip.
Or, if you’re like a lot of business owners, a better analogy might be covering up everything except just one gauge: how much gas is in the tank (AKA how much cash is in the bank).
If you’re driving blind, you don’t know how quickly you’re burning through that tank of gas. You won’t notice when the check engine light comes on, and you won’t be able to diagnose the problem if the car breaks down.
Your business speaks the language of numbers, and implementing a simple, easy-to-read financial dashboard opens up communication. That means you can make faster, higher quality decisions, focus on what matters, and course-correct sooner when you see trouble on the road ahead.
Part 3: What’s on Your Dashboard?
To master your bottom line, you need enough data to be able to answer three questions.
1. What just happened?
Every car needs a rearview mirror, because where we’ve been tells us a lot about what to expect next.
Financial reports like the Profit & Loss are critical for seeing trends and patterns, making predictions for the future, and learning from your recent financial decisions.
2. Where are we now?
In addition to knowing their cash balance, a savvy business owner will have a nuanced view of their current financial picture. What do you own, and what do you owe? Where do you stand in relation to your budget, breakeven point, and profit goal? Are sales increasing or decreasing? What about profits?
You’ll want to track some non-financial KPIs in real time as well – for example, conversion rate from prospect to client, client retention, or average transaction value all help you predict the future accurately.
3. Where are we going?
You may not know the exact route your road trip will follow, but you don’t set out without knowing where you want to end up. What’s your profit goal for the year? What benchmarks do you need to hit in order to confidently achieve that goal?
In the more immediate term, a rolling 12-week cash projection will provide vital insights and stay on track to hit your goals.
Recap: How to Run a More Organized Business This Year
This year, I’ve challenged business owners to invest some time to strengthening their systems for managing time, team, and money. You can find all parts here:
Part 1 – Prioritize working ON the business.
Part 2 – Prepare the team for growth.
Part 3 – Plan and track finances for a better bottom line.
This Week’s Takeaway
There’s no better time than now to start tracking and monitoring your financial data.
Do you have a clear view of where you’ve been, where you are now, and where your business is going?
Jan 29th: Tune Your Marketing Engine
(Without Spending a Fortune on Ads)
Join me this month for another fun evening at the Port Credit Log Cabin in Mississauga on January 29th, 6:00pm, to learn how to execute a modern marketing strategy that will generate more inquiries, referrals, and repeat business in 2025.
Click here to grab your tickets
Feb 13th: Master Business Management
Get Into the Management Mindset.
This February, the 12-week Management Program opens! It’s a series of educational sessions to help hone your coordination, refine your management process, and keep you up-to-date on the best practices every great manager must master.
Learn more, and register here to get started
Traction: By Geno Wickman
For anyone dealing with those all-to-familiar business challenges (slow growth, decision making, implementation, miscommunications), Traction offers practical strategies that can help. It focuses on six key areas of your business, providing simple yet effective ways to bring more clarity, growth, and focus to your work. If you’re looking for a straightforward approach to streamline your business, this could be a useful read.
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