Mind your numbers. This is important because it impacts your bottom line, your business's ability to grow, and ultimately, whether or not your business survives.

In fact, back in the day when I started my first business, all I ever heard was, “did you know that over 90% of startups fail?” It’s a frequently quoted statistic, but you wouldn’t want your business to become a part of that statistic, right? You increase the chances of your business’ survival if you have a firm grasp on your numbers.

WHERE ARE YOU TRYING TO GO?

Are we there yet? How would you know if you don’t even know where you are trying to go? Often, new business owners would be really passionate about their idea, and when asked what their business goal is, they say they just want to see where it goes.

If it actually goes somewhere, you are one of the very lucky few. If it goes nowhere, you are part of the majority. This is because if you have no hard numbers you are trying to attain and no benchmark for what is good or bad performance in your business and/or industry, how do you know when you should really go all-in into the business or put on the brakes and get out as fast as possible?

This is why determining where you want to go is the first thing you should do. How else would you know you’ve succeeded?

For example, if you know making 1000 sales per year is the average in your industry and you are coming in at 200, you should really consider whether you are cut out for your line of business. On the other hand, if you are bringing in over 2000 sales, you’re hitting it out of the park and should invest more time and effort into it.

If you don’t want to tie goals to hard numbers, how about aligning them with lifestyle outcomes? If your goal is to stop handling any administrative or human resources tasks in your company, what do you need to do to get there? If you want to free up your weekends so you can unplug from work as the business owner, who do you need to hire and train to get there?

The bottom line is you can’t get from A to B if you don’t know what or where B is.

WHAT ARE YOU GETTING OUT OF YOUR RESOURCES?

Now that you’ve set your goal, what’s the next set of numbers you should pay attention to? The number of resources you have on hand. This could be the number of staff, the dollars you have in the bank, the number of workable hours you have during the day, all of these are limited resources. As the business owner, your job is to make sure you maximize the efficiency of these resources. This does NOT mean working yourself or your staff to death because you won’t be operating at your best without the time to recharge. Got it?

Alright, let’s dive in.

Mind Your Cash Flow

Where’s the money? Is it sitting as a line item in your accounts payables? That’s not real money. That’s just money on paper. Is it sitting in the form of a cheque on your client’s desk? That’s also not real money. That’s still money sitting comfortably in their bank account.

One important lesson my early business advisors taught me is that it’s not real money until the cheque’s been deposited and cleared (try beating that lesson into an excited young entrepreeur’’s head). This is the most crucial lifeline for your business; without cash, you can’t pay anyone for services or products as inputs into your business — that means you will generate zero output. Yikes.

You MUST know when your money is coming in and also have enough money in the bank to account for delayed payments. It’s like when you’re waiting for your best friend on the patio, and they tell you they’ll be 5 minutes, but in reality, it’s going to be closer to 30 minutes.

Mind Your Returns

When you spend on marketing and advertising, do you try to measure all the outcomes so you can evaluate what you got out of your ‘resources’? Yes, money is a resource, and you should spend it very carefully. You should know exactly what you are getting out of your advertising spend. There are benchmarks for every industry, and if you don’t already know what those are for your industry, it’s time to put Google to work.

Just type in “online advertising KPIs for clothing company” and see what pops up. But, again, you need to know what’s good and what’s bad to evaluate whether you are adequately and correctly allocating your resources.

Is a CPM (cost per thousand impressions) of $10 good for your industry?

Is a conversion rate of 0.5% high or low?

Is an average time on page of 30 seconds a long or short duration?

Mind Your Time

Whatever it is that you are handling as the company's owner, is it the best use of your time? Do you understand what it is that YOU bring to the table? Do you also know what each of your team members brings to the table? I have always seen building a business similar to assembling a sports team; you need the right people playing the right positions on the team. You can’t try to stuff a creative person into an administrative role (unless you are prepared to clean up the mess).

To ensure you are making the best use of time, the one resource you can never get back, you need to allocate everyone’s time appropriately. If you’re THE person to do the selling, you should be handling all the selling or as much of it as possible. If you’re horrible at it, leave that to someone else and focus your time on what you’re best at.

Yes, we all have the same amount of hours as Beyonce, Bill Gates, Adam Grant, Michelle Obama, but how do they manage to do so much? It’s because they’re focused on doing what they’re good at, whether that’s singing, writing, motivating, strategizing.

Those are just 3 of many areas where you should mind your numbers. In my opinion, these are the most fundamental numbers I closely monitor in my business and are critical to the financial health of my business. Once you’ve worked out your own process of how you can mind your numbers, you will find that you could breathe more easily, because as an entrepreneur, one of the key things you worry about is whether or not you have enough cash in the bank. Now, imagine eliminating that worry. It’s not a dream. You could make it a reality!