Did you know that I have a degree in accounting? Business numbers come naturally to me, but I know that is not necessarily the case for everyone. I have found that there are certain numbers that are very important in business, especially if you are building an online business.
I love this quote from Marcus Lemonis, owner of CamperWorld and host of “The Profit” on CNBC.
So are you respecting your business by paying attention to your business numbers? Today we are going to talk about 3 areas of numbers that you must put attention to.
1. Your Personal Money
Do you know how much money is in your wallet right now? Here is a funny question: Is your money in order, or is it folded and facing different directions and upside down? I heard Suzy Orman say one day that when we have respect for our money, it can respect us in return. I know that sounds really woo-woo, and I am not at all woo-woo, but it was one of those things that struck me. Also, do you know how much debt you have at this moment? Do you track it on a spreadsheet? Do you know exactly how much your expenses are each month? How much money do you have to earn to cover your expenses and build savings? As a business owner, your personal financial situation trickles out to everything else – including running a tight financial ship at home.
2. Your Business Money
Do you know exactly how much you have sold to date this year? Do you create or have a bookkeeper create monthly financial statements? Do you balance your accounts every month? Do you know how much you have in accounts receivable and how old those receivables are? If you are not keeping track every month of your revenues and expenses, how can you tell if your business is viable? A bookkeeper is an important part of your business team, and depending on the size of your business, you can hire a virtual bookkeeper for less than $100 per month.
3. Your Conversion Numbers
Your money numbers are important in your business, but other numbers are equally as important. One example is your conversion numbers. How many people do you have to talk to convert one into a sale? Is that number 1 in 20, 1 in 10, 1in 5? When you know your conversion number, you can figure out how many people you have to talk to fill a program or sell your next product. Let me give you an example. Let’s say you are a money coach and want to put 20 people in a group program you teach. If you can close 1 in 10 people, you have to talk to 200 people to sell 20 into the program – 10×20=200. Now the goal is to find 200 people to talk to.
