Everything you need to know is in your numbers!
Last was a year full of surprises and potentially world-changing decisions across the global political and economic landscapes. The implications of those much debated and hugely controversial shifts in policy and power are still very much a matter of opinion and a tale that is yet to fully unfold. The future will play out, and we will have to live with the consequences; however unexpected or unbelievable they might be…
As we have seen in the last year, even final results can continue to cause argument. But only one thing is ever for certain: The numbers can never lie! And the same thing is true in your business.
People might lie about the numbers: but the numbers themselves never lie!
For millennia people have looked to the stars for insight into the future; or turned to runestones, tea leaves and (more recently) social media to seek guidance on how to react to what happens. All of these things are so open to personal view, misguided ideas and downright lies that it would be foolish to pay too much heed to their advice. Interestingly, however, the most consistent thing in the world outdates all of these ideas! One plus one equals two; two plus two equals four, and so on… These things have always been the same and simply cannot change.
Common sense (another scarce commodity) then, would dictate that any planning for future years must surely be built around the consistent and predictability of your business numbers. To trust the coming year to gut-feel, hopeful potential, good intention, market trends, expert opinion or similarly fragile ideas is, quite frankly, bonkers. You need to build on something solid and have a plan which will always tell you the truth.
Where are you today?
A detailed financial statement will tell you exactly where your business stands today. Please don’t confuse this with ‘money in the bank’ because that tells you as much as the number on the side of a campaign bus. I’m talking about a statement which lays out your sales, your costs, your margins, your cash flow, future tax liabilities and other outgoings and incomings – in real time. This is a statement which tells the complete, unabridged, detailed, accurate and truthful story of the last 12, 18, 24 months.
Armed with today’s true position and exactly what happened to bring you to this place, you can formulate a clear plan of how to march towards your goals: you can’t know where you are going until you know where you have been.
Where do you want your numbers to take you?
Outside influences and circumstances beyond your control are certain to affect you in the coming year: You can count on that completely. But having a clear numbers-based plan in front of you is the only way to combat the uncertainty that those things will create. Your numbers will tell you two very important, totally unshakable things: 1) If you are on track and 2) what you need to do to get back to the path.
Nothing else can give you the same level of clarity as your numbers. Of course, you still need to do all of the practical things which make the numbers add up (ie. running your business), but only the results of those calculations will tell you the absolute truth about how you are doing.
If you would like some help formulating and interrogating your numbers plan, I’d love to help.