The Importance of Knowing Your Business Numbers: Get Rich By Knowing Your Cash Flow

cash flow profits Aug 21, 2023

Running a business means you have to keep up with a lot of things. And one of the most important things you should never neglect is your financials. Many business owners might think that as long as they are making sales, they can get by. But knowing your numbers is so much more than just generating revenue. In fact, it’s one of the key indicators that will tell you not just how much money you’re making, but also how much money you’re losing. In this post, we’ll be discussing why knowing your numbers is important and how you can improve your financial situation.

18.5% of small-business owners plan to change business strategies in the next six months

As business owners look to remain resilient coming out of the worst of the pandemic, some are focusing on key areas of their business over the next six months: 20.2% plan to improve existing goods and services, 18.5% intend to shift business strategies, and 13.9% anticipate adopting or expanding use of digital technologies, Census Bureau data reveals.

With almost 1/5 of business owner's planning to make big changes soon...you'd think all owner's are on top of their financials, right?

Our experience shows that less than 10% of CEOs check their financials every month without a Fractional CFO or other outside company holding them accountable to their finances.

So why is it so important to look at your financial statements regularly?

The first reason why knowing your numbers matters is that it tells you where your money is going. Many business owners make the mistake of thinking that as long as they have money coming in, they’re doing well. But in the world of business, it’s all about profit. Knowing how much you’re spending and where that money is going can help you determine which expenses you can cut back on or which ones you should invest more into.

Another reason why knowing your numbers is important is that it helps you make better decisions. Business owners who have accurate financial statements are better equipped to anticipate trends and make more informed decisions about future investments. This could involve hiring more staff, increasing advertising budgets, or investing in new technology. All of these decisions impact your bottom line, and having a clear understanding of your numbers can help you determine which choices are best for your business.

In addition to helping you make better decisions, knowing your numbers can also help you identify potential issues before they cause serious problems. By keeping a close eye on your cash flow, you can identify any cash flow problems that might arise and take corrective action before they lead to financial distress. Knowing your numbers also helps you to create a realistic budget, which will help you avoid overspending and ensure your business stays on track.

Finally, knowing your numbers can help you create a plan for future growth. By reviewing your financial statements, you can identify areas where you can improve or expand your business. You might identify new product lines, or a new target market that you have not yet considered, which could help you grow your customer base and increase profits.

 

In conclusion, if you’re a business owner, understanding your financial numbers is critical to your success. Without accurate financial data, you won’t be able to make informed decisions, identify potential issues, or plan for future growth. So, take the time to review your financial statements, and invest in a good accounting team to ensure you have the ACCURATE data you need to make the right decisions for your business. Remember, knowledge is power and having the right information at your fingertips can make all the difference in your success.

Hey, you! Yes, you with the awesome business and the passion to make it big! Are you tired of trying to juggle finances and crunch numbers all by yourself? We totally get it - that's why we're here to help!

With our fractional CFO services, Bookkeeping and/or SOP Building packages! With our help, you'll have a team of financial experts at your fingertips, ready to take on all the financial tasks that come with running a successful business. From cash flow management to budgeting and forecasting, we've got you covered.

Our team of skilled professionals have years of experience in providing top-notch financial services to businesses of all sizes. And with our fractional CFO services, you'll get all the benefits of having a full-time CFO, without the cost.

So what are you waiting for? Take your business to the next level and contact us today! We promise, it'll be a decision you won't regret. Plus, our team is pretty amazing - if we do say so ourselves.

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