How well do you know your business?
If I were to ask you how much money you have in the bank right now, would you know the exact number?
As a business owner, there are 5 things about your business it is crucial to know. Although, with all your daily tasks and responsibilities, it can be so easy to forget.
So I’m going to make it simple for you by sharing 5 things about your business that you have to always keep a close eye on.
1. How much cash you have in the bank
With so many transactions happening daily, there’s always money going in and out, which makes it easy for you to lose track of your financial situation.
Tip: Check your bank account daily.
2. How much money is coming in
It’s the second most important thing you need to always know about your business.
Now, when you have a cash-business this is an easy task.
Let’s say you’re a grocer. You pretty much know what’s happening with your money every single day:
- Your day starts with going to the market and spending about $1,000.
- By the end of the day, you’ve got about $2,000 left over.
- You have a clear picture of all your financial transactions on a daily basis.
Tip: Make sure you’re always in the loop with the money that comes into your business.
You might also be interested in: What is a key performance indicator? Why have them?
3. How much money is going out
You’ve probably guessed this one.
It’s important to figure out how much cash is going out. Otherwise, the money coming in is going to get absorbed by the money going out.
Tip: Make a plan of all your financial transactions and stick to it.
4. Your money maker
How can you identify your money maker?
Take a minute and think about what is it that you do, on a daily basis, to make money?
Every business has its own way of bringing cash in.
Accountants have to do tax returns. Financial planners have their clients. Insurance agents have policies. The guy who runs a restaurant has his tables.
Let’s identify the money maker for a restaurant business: Establish how many people need to come in and how much they’re going to order in order for you to make some profit. That’s basically your break-even analysis.
Find out more about How To Make A Break-Even Analysis For Your Business
5. Measure your money maker
You need to know the exact numbers.
When I was 15, I used to work at Pizza Hut. I remember those pagers we had (anybody else remembers those pagers?).
Each day, we had to send a message through the pager to the area manager to tell them how many pizzas we sold and how many people walked through the door. We had to keep track of the numbers on a daily basis. That was a way to measure the money maker.
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Tip: Evaluate your money maker daily. Focus on the numbers.
Do you want to have a successful business?
Make a habit of looking after these 5 things about your business daily.
I can assist you in all matters regarding your business. Whether you have questions about company set up, accounting related inquiries or you want some tips on how to grow your business, I am here to help you.
Most importantly, by looking at your business now, I can show you exactly where those five things are happening – which can tell you where you need to improve. Let’s get in touch below.