When’s the last time you got into your car and drove it from A to B with your eyes closed? Chances are, unless you’ve completely lost your mind, the answer is “NEVER”!
You would never dream of putting your life or the safety of your family at risk by relying on blind faith, would you? Your life depends upon your ability to see and interpret what the gauges on your dashboard are telling you.
Similarly, if you are currently in business and you cannot read and understand your financial statements, you are putting the financial health of your business and the financial security of your family at risk every single day. It is “as if” you are driving your business completely blind and just hoping that you will be profitable at the end of the year.
Isn’t this the definition of insanity?
Your financials are to your business what the dashboard is to your automobile. Financial statements tell you exactly where you business is at and can help you to predict where it is likely to be in the future.
You probably didn’t realise that these numbers – the speed, direction and fuel capacity of your business – can tell you a lot more than you thought. They can tell you why you’re suddenly struggling to pay the bills, why your business is not performing as well as you thought and why you’ll have to forego your salary – again – because there isn’t enough cash.
Have you ever looked at your financials and wondered what they meant? Are you embarrassed to admit that you simply file your statements away each month because you can’t read them? Do you waste money and time chasing new leads and sales instead of fixing what’s wrong and making it more profitable?
Let me share with you a story about one of my clients named Brian. Before he joined Imagineering Profit, he had an established coaching business in a great location where many new competitors were opening up and threatening to steal market share. For these reasons and more, Brian was keen to sell.
One day, a woman walked in and said, “I think you have a great business here and I want to purchase it.” She had recently received a large redundancy package and completed her advanced training as a coach. After careful consideration and some research in the local area she determined that Brian’s business was perfect for her new start. Because she was cashed up, she was able to make him a generous opening offer of $1.2m. But unfortunately, the deal fell through.
Now, I know what you’re thinking… $1.2m sounds like a pretty good offer and Brian should have taken the deal and ran. And you’re right, it was a pretty fair offer in the circumstances but the deal still fell through.
When she asked to see the financial statements of the company, Brian happily turned the Balance Sheet and Profit and Loss statements over to her. She took the financial statements and let him know that she would get back to him in about a week – after she had some time to review and analyse the numbers. Brian never heard from her again.
If Brian had been able to read and understand his own financial statements, he would have known exactly why she never got back to him. Despite the fact his business was profitable (on paper), he failed to understand that the statements clearly showed his business didn’t have positive cash flow or strong financial indicators.
If only he could have read and understood the numbers, before she approached him with a generous offer, he could have easily fixed the problems and prepared for a lucrative sale.
Thankfully, this story has a happy ending. Brian got some help and he learned how to read his financial statements. Therefore, he identified where the pain was in his business and this allowed him to focus his time and money on the areas that were most important to the health of his business. Ultimately, he was able to turn it around and sell it for a handsome profit in less than 10 months. By knowing where to direct his energy, he was able to ask better questions, make better decisions, step up as a leader and start achieving the results that he deserved.
Now, you may be asking yourself “how does this apply to YOU and your business”?
First, if you have been avoiding your numbers, what you have done up until now means nothing compared to what you are going to do about it right now. Today is the best time to stop, decide and take action to get the help you need to understand and apply the insights on the dashboard of your business – your financials.
While it is perfectly normal to rely on someone else to prepare your financial statements, you are responsible for the financial health of your business. This means that you owe it to yourself to learn how to unlock the insights and take action that will produce your desired results.
If you want to learn a quick and easy way to calculate your key performance indicators and understand what your numbers are telling you about your business, then you will want to sign up right now for Imagineering Profit. Imagineering Profit is an online proprietary financial analysis tool that helps you to pinpoint pain in your business so you can focus your time and energy and take action that will improve your bottom line results. This information is invaluable for you if you are a coach or a business owner.
How much more confident and relaxed would you be if you were running a successful and thriving business?
What if you could double your bottom line by simply working smarter not harder?
No matter where you are at right now in your business, you will come away with some powerful insights and strategies to grow ANY business in ANY economy and you will learn exactly HOW to whip your business into shape and start taking home more cash in your back pocket today!
