This week I read an MBA case-study about a company that was
increasing sales and gross revenues by over 60% a year, but
managed to go bankrupt. The problem? They weren't keeping
an eye on costs, or to put it another way, no one was
watching the store.
Most entrepreneurs love to focus on "sales."
Understandably, we love our products and we love our
customers, and the temptation is to measure "success" based
on what are often called "top-line" numbers.
If we sold 100 units last year, and sales increase to 500
units this year, surely we are doing much better, right?
Unfortunately, the answer is, "Not always."
Every business must monitor the actual profitability of the
enterprise. Whether you are a single entrepreneur (perhaps
a sales rep or solo professional) or own a small business
or run a huge multinational, the principle is always the
same. Increased sales are nice; increased PROFITS are
better.
Profits are what you get to keep, and the only way to
measure how much you are actually making is to track the
numbers. There are many number of accounting systems and
packages available. The key is to work with a good
accountant and find the best (and simplest) system that
will truly give you all the information you need to manage
wisely.
Too many small business owners neglect the "paper work."
They tend to do the minimum of meeting payroll and
balancing the checkbook, and leave other "details" for
"later." That can lead to disaster!
Business owners have many jobs, including providing
leadership, innovation and sales, but one of your most
important (and most-often neglected) is to track the
numbers. Your job is not done until the paperwork is
complete!
Track the numbers. They are your key to profits and wealth!
increasing sales and gross revenues by over 60% a year, but
managed to go bankrupt. The problem? They weren't keeping
an eye on costs, or to put it another way, no one was
watching the store.
Most entrepreneurs love to focus on "sales."
Understandably, we love our products and we love our
customers, and the temptation is to measure "success" based
on what are often called "top-line" numbers.
If we sold 100 units last year, and sales increase to 500
units this year, surely we are doing much better, right?
Unfortunately, the answer is, "Not always."
Every business must monitor the actual profitability of the
enterprise. Whether you are a single entrepreneur (perhaps
a sales rep or solo professional) or own a small business
or run a huge multinational, the principle is always the
same. Increased sales are nice; increased PROFITS are
better.
Profits are what you get to keep, and the only way to
measure how much you are actually making is to track the
numbers. There are many number of accounting systems and
packages available. The key is to work with a good
accountant and find the best (and simplest) system that
will truly give you all the information you need to manage
wisely.
Too many small business owners neglect the "paper work."
They tend to do the minimum of meeting payroll and
balancing the checkbook, and leave other "details" for
"later." That can lead to disaster!
Business owners have many jobs, including providing
leadership, innovation and sales, but one of your most
important (and most-often neglected) is to track the
numbers. Your job is not done until the paperwork is
complete!
Track the numbers. They are your key to profits and wealth!
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