What’s the first thing that comes to your mind when you think about April? Is it April Showers, Spring fashions, Easter, or Passover?
One thing that comes to mind for me is money. April is tax month for personal income and preparing things for my accountant provides an ideal opportunity to review my personal finances. As a business owner, my personal finances are very much tied to the financial state of my business.
For too many years, I had a much better handle on managing my personal finances than I did on managing the finances for my business.
Is that true for you, too?
You need to know more than your bank balance to really understand the financial picture of your business. For example:
- Do you need more staff or different staff?
- Which services should you do more or less of?
- What are the possible risks and rewards of expanding your business?
Here are three things you need to know about your business to make sure that you are making the right decisions:
- What does it cost you to deliver each unique product or service in your business?
- What is the profit margin on each unique product or service?
- Where can changes be made to reduce the cost of service or increase the profit?
Those things aren’t found on your standard balance sheet or bank statement. You have to look a little deeper and track trends over time. When you really master ALL of the components of your financial picture, you’ll be amazed what develops!
As you move into April, keep an eye on those numbers…they are speaking to you.
Blessings,
