As a business owner how often do you analyse the numbers to see how your business is performing? Do you know what the Profit & Loss and Balance Sheet is telling you when they are presented by your accountant? Do you know the link between your cashflow and your profit?
Answering no to any of these questions means you are missing out on vital information that could help you improve your business.
A business owner should understand what the key drivers are that run their business. They should also be able to understand what a change to one of these key drivers does to the performance of their business. What effect on profit and cashflow does a 5% increase in sales volume have? There is a chance that this 5% increase in sales will increase profit but potentially decrease cash flow.
You started your business because you are good at what you do and you deliver it well to your customers. This is the part where you are said to be working “in” your business. You also need to spend the time working “on” your business. This is understanding the numbers. What is the average number of days it takes your customers to pay you? What would be the impact if you could improve this number by 10%?
This is where we can come in. At Silvan Ridge, we can sit with you on a regular basis to analyse your business. We can also help to evaluate “What If” scenarios to see the impact of your business. “What if our price increases by 10% but we lose 5% of our customers?” What is the impact of this on your profit and your cashflow.
Understanding the possible impact of a decision before you make it can give you enourmous confidence in being able to make changes.
If you would like to know more about working “ON” your buisness and understanding your numbers, contact us for a free consultation on firstname.lastname@example.org or phone 03 5559 7111