There’s always those moments in life that make you stop for a minute. Those moments that make you kind of look in the mirror and ask tough questions…
As I think back on my life some of those have been times like when my parents dropped me off at college and I was on my own for the first time. I stopped and thought about who I wanted to be and where I wanted to go in life. I vividly remember getting in a car wreck for the first time and it kind of taking my breath away as I thought about how much worse it could have been!
A few years ago I got in a pretty bad boating accident where I could have lost my arm or even died…and yet for some reason, I was spared that tragedy happening. There are moments in our life that just make us stop dead in our tracks and go…huh?
I think those moments happen in the business world just as frequently if we will take the time to look for them!
One of those moments happened recently with a client of mine. We were building out their Profit Accounts and as we were looking at the P&L’s from the past couple of years we got to this year. Right down at the bottom in crystal clear, black letters it said Net Income: -12,000 dollars.
“Well that can’t be right!” they looked at me and said. Unfortunately, we went back over the numbers again and there was no hiding from them. The numbers were correct. Because the numbers don’t lie!
“How did we make all this revenue (and it was a lot by the way) and still lose money?”
I didn’t have the answer at the time, but the best part about this is it was a moment they will never forget in the life of their business. This is a time that they will look back on years from now as a tidal wave of change in the life of their business. The moment they chose to be profitable and embrace the numbers of their business instead of hiding from them like most of us do and figuring it out at the end of the year.
Lead Well.
If you’re looking for more resources to work ON your business, we have them.
Most of us treat the numbers like it’s the check engine light in our car. Just ignore it long enough, hope for a bump that disengages the wire, and voila! No more check engine light. Or maybe you get a black piece of tape and cover it up to pretend like it’s not on.
That’s what we do with our numbers…and y’all I have news for you. The problem doesn’t magically disappear! Something has to be done.
Now here’s the great part. We have tools to walk through this. We began building out their multiple bank accounts and will be forcing them to operate their business off a set percentage of their revenue. They will know EXACTLY how much they have to run their business off of in order to turn a profit. They don’t run a non-profit anymore!
You see here was the thing…revenue was not their issue. Often times revenue isn’t the issue, but it’s actually the system that the revenue is filing into. We don’t build the proper system within the business to handle the revenue, so it gets frivolously spent on whatever you deem is necessary and at the end of the year you figure out where you landed.
That’s no way to run a business. One of my favorite quotes we throw around here at BOP is the quote…there’s no competition for a well-run business. Hear that again, “There’s no competition for a well-run business!”
And it’s so true. When you build out the systems and processes to be able to handle the work and revenue that comes your way there’s no stopping you!
So…do you have a grasp on your numbers. Let me tell you about two tools that we use at BOP to give business owners clarity on where they are. The first is a Profit Assessment tool. It’s what we used to diagnose the issue with our client. Kind of an instant assessment for how you’re operating and it is powerful.
The second one we use is called our level two dashboard and it’s a week to week picture of receivables, payables, and an instant snapshot of your job performance every week of the year. This helps you see the highs/lows of your business to be able to effectively track where you need to be a bit more frugal throughout the year. This also helps you project out months as you can see what is coming in/going out and provides ultimate clarity on how efficient your business is running strictly from a numbers standpoint.
It’s a GAME CHANGER to help you get on top of your numbers and never get surprised by a P&L again.
Do NOT wait to get on top of your numbers. It is worth it to you, your family, your employees and ultimately the people you do business with every single day.
Have a great rest of the week everyone!
Scott Beebe is the founder of Business On Purpose, author of Let Your Business Burn: Stop Putting Out Fires, Discover Purpose, And Build A Business That Matters. Scott also hosts The Business On Purpose Podcast and can be found at mybusinessonpurpose.com.
