Cash And Sales: The Keys To A Successful Business
Do you know your numbers?
POSTED BY JONATHAN VOWLES ON 06/09/2016 @ 8:00AM
If asked, everyone who runs a business would probably say that the two keys to a successful business are cash and sales, and actually, they are frequently two sides of the same coin ...
The keys to a successful business are cash and sales! Do you know your numbers?
copyright: alphaspirit / 123rf stock photo (licensee)
But what does this mean for you in your business right now? Let's face it, we are in uncertain economic times. Ok, so the recession is long behind us, but taxation is still painful, the government debt is still huge and the banks are cherry-picking who to lend money to.
"It's difficult times for everyone in business right now!"
So if cash and sales are two sides of the business coin of success, what can you do this week, today, and right now to help your business be better?
Well, the first thing you must do is understand where you are right now. Information and analysis of your business is important, and not just any numbers; freshly prepared current information, put together on a monthly basis, is essential. Only by understanding the consequences of the numbers, can you understand what those numbers mean for you.
The first side of the coin is cash
The two most important numbers are debtor days and, if you carry stock, stock turn. If you sell time, then the % of hours that are charged rather than lost and the amount of time locked up in 'work in progress'.
The quicker your stock turn, the faster your expenditure on purchases turns into sales. The quicker your debtor days, the faster your sales turn into cash. So, first of all, know what they are. Then understand what you and your team can do to improve them.
There are so many ways to work on this that it would take a whole book not just a blog post to talk about them, but if you need help, do get in touch with me.
The other side of the coin is your sales
You need to understand it completely! What does your sales funnel look like? Is your sales function a bit dull? Is your team slick and prompt in quoting, taking orders, invoicing and responding to the customer? Just how customer focussed are you? Do you and your team speak to your customers regularly and build great relationships? Are you evolving and launching new products? Are you finding and managing prospects ... and do you measure the numbers within this to track what you are doing and identify weaknesses?
And, of course, what are your competitors doing? Are they better than you at this sales stuff? If so, you can end up spiralling down into underperforming and business death.
Well, talking about business death isn't going to cheer anyone up, so I'll end it there, but hopefully it will spur you on to review your numbers and then do something to improve them!
"Cash and sales: know your numbers!"
If you want our help to improve your numbers, then ask about our business builder review when you call me on 01234 752 566, or click here to send me an email enquiry, and let's see how I can help you.
Until next time ...
If you're looking for a new accountant to help grow your business, do visit www.jvca.co.uk and discover how Jonathan Vowles Chartered Accountants can help you!
I've been an accountant in and for business since 1987 and have a wide experience of consultancy, audit, accounts, taxation and wealth planning work from individuals and small businesses to multinational corporations and charities.
My eclectic interests in growing and developing business span a number of areas … and can be summarised as strategic business advice and tax saving advice.
I have worked with the Chamber of Commerce to deliver courses for people about starting up in business and have lectured about tax for a major accountancy practice and for Milton Keynes College.
I relax by reading fiction and by getting away from the office in a campervan.