Know your Numbers

As a business owner, it is important to know if your business is flourishing or just getting by. The Numbers of your business are telling you a tale. Understanding your story is going to help you remain in business for a long time.

Every business has challenges, but by understanding your Numbers you would be able to recognize the warning signs, easily identify problems, and fix them right away. The key areas to help you familiarize yourself with your Numbers are:

• Revenue (sales, service fees, money you bring in);

• Expenses (money you spend);

• Profits (Revenue – Expenses); and

• Debts (what you owe vendors and lenders)

• Outstanding Receivables (you can’t make profit if you don’t get paid)

These help you identify parts of your business that may need improving. For example, if comparing your phone expenses from this year’s numbers with last year’s, results in a higher expense total it may be the time to shop around for other phone services with lower costs. It is extremely important to keep an eye on your expenses closely if you want to stay in the black.