The Financial Drivers
The five numbers you should know every month.
- Learn Them
- Remember Them
- Use Them
All businesses
1. Sales - always drive cashflow and profits
2. Profits - shows if sales targets are being achieved and costs are being controlled
3. Cash - vital, the lifeblood of your business, never run out of cash
If appropriate to your business
4. Debtors - who's not paid you, do you need to improve your credit control, chase those debts and get the cash in
5. Stock - how much stock you hold, keep a close eye on stock levels, don't have too much cash tied up in stock
Drive with care...
Keep your eyes on the dash and the road ahead. Be aware of what is happening now. And what could happen in the near future.
Learn to anticipate what could be around the next corner, eg. a new competitor opening across the street, new health and safety regulations, changes in tax rates. How would you respond? Think about it now. Make plans so you are prepared when it does happen so you can react quickly and deal with the potential problem before it gets serious.