For those who have seen the Christmas classic It’s a Wonderful Life, do you recall the scene where George Bailey is talking with his guardian angel, Clarence? George needed $8,000, but Clarence didn’t have any money on him. He was an angel after all. He didn’t carry cash. Well, we probably all feel a little like George Baily right now. We could certainly use some money. As a business owner or organizational leader, we need to be in full scale leadership mode. This includes knowing how your business is functioning today, right now. In Tilman Fertitta’s recent book, Shut Up and Listen!, Mr. Fertitta recommends that we must know our numbers. We need to know if we have money. That’s the only way we can know exactly how the business is doing, the only way we can know how to make good, meaningful, and long-lasting decisions. Now, what numbers is Mr. Fertitta referring to? Every business is different, but every business needs money to survive.
Here is today’s directive… know your numbers. Conduct a review of your financial statements – income, cash flow, and balance sheet. Answer these questions: What is your net profit? What is your gross revenue? What is your cash balance? What was the increase or decrease in cash from last month and last year? Do you have more assets than liabilities? Compare today’s statements against last month and last year. This is your big picture. Next step is to dive into the details.
Jeff Newkirk, Founder & CEO, PEM Consulting Group – a management consulting firm, pemconsultinggroup.org 281.591.4747