Your finances. Quite often the last thing that gets done on your to do list and then hurriedly put together when you need to send them to your accountant. We may also give them a cursory glance at the end of each month to see what our bottom line is. But dealing with our facts and figures shouldn’t be this way. Looking into our numbers can reveal far more to us than simply what we’ve made each month.
Here are 3 ways to get the most out of the figures you record:
- Work out your profit on each individual item, package or venue so that you know if they’re making you money or losing it. You may be making profit overall but actually losing money on certain products, classes or packages. Sometimes we just look at the bigger picture but breaking it down into smaller areas gives us greater clarity into what exactly is profitable for us and what’s not.
- Calculate what your break-even number is per month. Whether that’s the number of children you need in a class; items sold or individual clients seen or gained, knowing exactly what you need to achieve to break-even (after all of your costs have been taken into account) will give you a clear and realistic target to aim for.
- Break down your expenses into categories so that you can see exactly what you’re spending in each area. Sometimes this is the perfect way to see where we need to invest more or start to cut back. If we look in detail we can usually find some rogue direct debits that we’ve forgotten about but which add up to a sizeable amount over a year.
Figures are just numbers unless you use them to your advantage. If you analyse them and utilise them effectively they can give you valuable insights into your business and show you where you should be cutting costs and/or increasing those prices. Knowing what you need to focus on will save you time, ultimately increase your profits and make running your business more effortless.