Does this sound like you: “I’ll just work harder and sell more stuff/get more clients. That’ll turn my financials around.”
Well, as Jay Goltz says in his FSB article, “Why Small Businesses Fail,” working harder won’t fix a broken businesses model. You’ll either face burnout, or worse, a bevy of legal headaches resulting from your inability to pay vendors, employees, and other creditors.
As frustrating and daunting as it may seem, “every business owner needs to be his or her own CFO,” says Goltz. But how do you know what to look for? How can you make more informed decisions?
One way, certainly, is to hire a CPA or CFO to help you interpret the numbers (and educate you in the process so that you know what you’re looking for). Another, suggests Alan Badey, in his New York Enterprise Report article, “Uncover What Your Numbers Say About Your Business,” is to create a basic business dashboard so that you can see and analyze the numbers that substantially affect your bottom line. These include:
- Using existing technology and systems
- Determining which areas/data are most valuable to track
- Comparing numbers not only month to month but year to year
- Sharing data with key employees
Your dashboard will help you better forecast and budget–and can help catch fraud, Badey writes.