Crunching the numbers in your business is a vital part of determining the health of your company. CEO’s know these numbers all too well as they keep a watch on the figures. Here are the numbers you need to know in your business.
Inadequate Profit Margin
Without enough profit, owning a business is a financial drain. When profit margins are low, a company is not able to grow. Here are some things to consider in regards to your profits.
- Do you understand where your business makes the most money?
- Do you have a profit plan?
- Do you have a profit design set up?
- Do you have competitive prices or an effective price structure?
Once you have a good grasp on these areas, you can target the specific places that are not doing well.
Cash Flow
Having a large enough cash flow to pay for operating costs and unexpected expenses can be a real problem for businesses. Even if you expect to pull in enough to cover all of your expenses throughout the year, without enough in reserves, it makes it difficult.
These are the things you need to address in order to free up cash in the business.
- Do you have a profit plan?
- Do you have an operational plan?
- Do you have a marketing plan?
- As the CEO, do you pay attention to the financials?
Limited Capital For the Company to Grow
In order to grow a business, you need enough capital to invest in expansion. Without this capital, your company will come to a halt on growth.
Here are some questions to answer.
- Have you identified the capital your business needs?
- Do you have a profit plan?
- Do you have an investment plan?
- Have you identified potential investment sources?
When you get a handle on these ideas, you will be able to grow enough capital to expand the business. These are numbers that all CEO’s need to know about their company. Without the data, and using it properly you will come to a standstill in your business.
Written for us by our associate Gary Sorrell, Sorrell Associates, LLC.
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