As business owners, we are there from the very start, long before it was a business when it was just an idea. To work for so long and to finally see your business grow is a great feeling.

Even with setbacks and the hurdles you have to face, having your financial freedom and carving your path is a dream come through.

In recent years, most businesses have changed immensely. Some have flourished, while others have failed.

The impact of Covid has greatly changed how businesses operate around the world, from remote working to global teams-the traditional forms of working are most likely gone forever.

This is not to say it is a bad thing, but it does mean there are many areas of adjustment that need to take place within business.

4growth has helped businesses transition through many phases, this is just a new phase, for us and you.

With that being said, there are always business practices that will never change including finance, delegation and constant learning.

Knowing your business numbers is essential for its proper administration and running. Though an often-complicated area, with the right knowledge and planning you can strategically delegate tasks that allow you the control your numbers, without the need to know and understand them all.

Knowing Your Numbers:

The driving force behind almost every business is its numbers. Profits, losses and savings all contribute to the growth, decline and diversification of your business.

It is essential that you know your business numbers and/or that you have a team in place that know your business numbers.

Without this knowledge, it is impossible to gauge success or failures and to adequately plan for your business.

There are a few numbers that you should know for your business including:

Balance Sheets:

This includes your company’s assets and liabilities.

Everything from stationery to property and vehicles needs to be noted and understood. You can plan for depreciation, understand tax and insurance right-offs and get a broader glimpse of your company’s net worth.

Liabilities are third party costs. Insurance, bank loans, interest and tax outgoings. These broader costs balance what your business is worth.

Cash Flow:

This is the operating cash flow within your business, considering immediate expenses and income.

You have to ensure that your cash flow is always in the green and that you can meet your monthly/yearly expenses with your current income.

Net Income:

This is your profit margin after all expenses have been taken out. This can usually be figured out after the tax stage of the year.

Again, it’s important to keep this in the green to ensure your business has the start capital for the next tax phase.

Profit & Loss:

This can be calculated through specific periods of the year, usually quarterly or every six months.

With this figure, you can make strategic changes to improve profits and reduce expenses through your next planning phase.

Sales:

Sales are one of the most important indicators you should keep track of at all times.

Note when sales increase or decrease and research why this is occurring.

What changes do you need to make?

This can be a great indicator for employee KPIs and as a way to understand why certain products are profitable and others are not.

Price Point:

Knowing how much an item will cost you is crucial to understanding what you can sell it for.

How much of you spent on the product/service + other expenses such as rent, shipping and tax etc.

With this combination, you can work out your price point + the profit. With this, you can establish your gross profit margin and see if it is a sustainable product or service for your business.

Inventory:

The final primary number for your business that you must keep track of is your inventory.

Weekly stock checks let you know what is selling and what is not and if there are areas that you need to change.

Ensure you are not wasting money on storage or excess inventory and ensure you can maintain sales by having the appropriate inventory in stock.

Getting to grips with your business numbers may not be the most exciting part of your business, but they are essential to its growth.

You can keep costs low, understand your profit loss margins and plan for future expansion when you know what your business is doing in the background.

No matter the outside forces, be it Covid, supply chain issues or differences in the economy, when you know what is happening with the numbers in your business you can adjust accordingly.

Do you have to know it all?

To get to grips with your company numbers it is not essential to be a maths wizard or understand all the nuances of tax as it relates to your business.

In the initial stages, a lot of this can be taken care of by yourself or a small team, but as your business grows and the numbers become more complex it is important to hire additional help.

You may need an accountant each tax year to go through your books or if you are even larger, an accounts department.

It’s important to know when to get this additional help.

Being compliant especially with your tax and knowing your business’s profit or loss margin is essential for sustaining and growing your business.

Without additional support, it can become very complicated very fast.

It is still essential though to have a broader idea of your numbers so you can adjust accordingly.

One of the best ways to get to grips with your business as it grows is to delegate to the right staff and allow them to take care of these important operations for you.

Delegating your numbers:

As your business grows it becomes more essential than ever to delegate tasks to the right teams and individuals.

You cannot sustain business growth if you remain hands-on in every area of the business.

As one of the most important parts of your business, delegating your finances and other related numbers to someone else may seem risky, but it is essential.

Unless you have that particular background, finances and taxes can be incredibly complicated.

Hire and vet the right team members to take care of this for you.

They can provide you with easy-to-read reports, suggestions and summaries for your position.

If you get bogged down in the details of the finances of your business, it may be too overwhelming.

Delegating to account departments, hiring stock and warehouse supervisors or outsourcing accounts and tax projects to third parties will free up your time.

This will allow you to focus on areas of the business you know and understand better and improve the quality output of your business.

Seeking outside help:

Business numbers are a primary driving force for your business, they highlight more than anything how your business is doing.

They ensure you are compliant, and they inform you when changes need to be made.

They also become progressively more complicated as your business grows, so it’s important to know when to outsource and incorporate new team members to help or take over these areas.

Though we have talked about the primary financial factors that impact a business there are many more.

A business coach can help you get to grips with the numbers that are most important to your business and how you can use them to your advantage.

They can also highlight when it is necessary to seek further assistance be it financial or legal.

Many business owners are guilty of holding onto too much control and planning within their business, essentially smothering the business that they are trying to grow.

With a business coach available to make suggestions, highlight areas of improvement and act as a soundboard for your business, they are incredibly invaluable.

Berach consulting has hands-on experience working with various businesses across Ireland and the UK.

We understand the confusion and complicatedness of business numbers and what they mean.

We also understand when it is time to delegate and seek assistance.

We can help you along your business journey with our patience, experience and insider business knowledge that will further the growth of your company.

Get in touch with 4growth today.