Many business owners prioritise the work they love before looking at the numbers in the business and inevitably encounter difficulties.
Clients who enthusiastically buy repeatedly and who help the business development sometimes aren’t your most profitable clients. Only by analysing the numbers can the real picture be seen.
There are so many stories of talented individuals who lost a lot of money to an unscrupulous – or ignorant – an accountant or financial “wizard”. Elton John loved performing and never wanted to sit down and look at his expenses. That resulted in a dramatic court case highlighting that in 20 months he spent £40m, including £293,000 on flowers alone! And although he recorded the dates and attendance of the concerts on his tours, he was happy to leave all other details to his manager. He said at the time “I have a flair for writing songs, I have a flair for composing, I have a flair for performance, I have a flair for recording. I do not have a flair for business.” That was an expensive mistake.
Rachel Elnaugh started Red Letter Days when she was only 24. She expanded the business very fast and was convinced that she had “the Midas touch”.
However, it got to a point where the business was in deep trouble, and she called in two of her “Dragon’s Den” colleagues for help. Peter Jones and Theo Paphitis then took 10 years to turn Red Letter Days around before selling it.
Her advice today is “Start as small as you can and be prepared to modify your business plan in light of developments”.
To repeat: looking at the numbers reveals your profitability.
Even if numbers are not your natural strength, the vital thing you need to know is the relationship of one set of numbers with others. You need a high-level “helicopter view” of where the strengths and weaknesses of the business lie. Flourish can provide this.
For an impartial view of your business’s unexploited areas, contact Flourish to get your FREE Business Performance Assessment.