Take an honest look at your numbers.
I know. This isn’t the “whoo hooo we are goal setting ” moment that you wanted. No planners. No cool strategy maps. No vision boards or business plans.
Instead, it’s a quiet moment of reflection for some. Or a “Let’s come to the altar and pray ” moment for others.
All you need to do is ask yourself two questions:
- How much did I make?
- How much did I spend?
Do not JUDGE your wins or “fails”
If you are anything like the Type As I often work with, you’ll feel like a failure. It’s easy when you start thinking about your plans for the year. The comparisons with other businesses. And what you know in your heart your business can earn.
Instead consider yourself a researcher. Someone gathering data. Numbers that don’t mean anything. No stories.
Just the numbers of what you earned and spent.
If you start analyzing what happened, you’ll never complete the activity. So don’t judge it. Don’t start asking questions. Don’t make up stories.
Just look at the numbers. You’ll get the finish line much easier.
Gather everything. Then organize.
If you haven’t done a good job this year of organizing your numbers, don’t sweat it. Set a goal to get everything done by mid-January. You don’t want to start January without understanding what your business earned and spent. And if you wait until the tax season, you won’t get a financial advisor’s or accountant’s full attention.
So start now. Gather everything. Put it in one place and resist the urge to organize it at this stage.
Here is a list to get your started:
- Your business receipts – Dig through bags, suitcases, folders, stacks of paper, etc.
- Your credit card statements – Highlight business expenses. Create an Excel or download using tools from cards like American Express.
- Your invoices – If you use an electronic system, print everything and smile. If not, use Excel or a notebook and list all of your billings. Use your bank account and calendar to jog your memory.
- Your online accounts like Paypal or Stripe – This one is easy. Download the numbers. Include fees and other incidentals so that you have a full picture.
- Your cash sales – This one is hard. Because cash is easily spent. Use your calendar for events you attended. Or go back and reference your receipts. Do your best and set up a better system next year. #nojudgment
Organize it. Get help if you need it.
The first year I did this, I wanted to cry. Let me stop fronting. I did cry. Because it was hard.
However, after I developed the common business categories, it got easier.
The easiest way is to start by month. Separate expenses and sales.
Once you gather everything by month, look for common trends.
- Do you have numerous expenses for something like your website and technology? That’s a category.
- Did you have a variety of ways that you sold – ie. 1:1 coaching vs group events? That’s 2 more categories
Look for patterns and trends with your numbers. It’s easiest when you have EVERYTHING in one place.
And don’t stress it. If you can’t figure it out, hire your bookkeeper or accountant for a few hours. Talk to your business coach or mentor to deal with the “finance demons” that arise.
Walk away from everything
Yup. After you see the numbers, it’s hard not to go into planning/action mode. Because you want RESULTS.
Don’t. Step away. Do something that you love. Take a few hours to walk through your favorite holiday setting. Hang out with friends and have some laughs. Read a book or watch your fav movie. Watch your favorite sports team.
But don’t try to figure out a plan immediately.
Why? Your brain will be mush at this point. It’s hard to come up with genuine solutions when you are too close to the numbers. You need time to step away and think creatively. Hear how others solve the problem. Brainstorm options.
So give yourself a few days.
Assess where you need help in your business next year.
Why you really want to keep going and do this?
Because you are now empowered
- You won’t call a coach and say “I need to earn more money”.
- Instead you’ll know exactly how much you need to cover your expenses and what your best sales categories are.
- You can start with those numbers to build a better plan.
- You won’t complain to your accountant about paying a large tax bill.
- You’ll be able to project your earnings and set aside money from each sale.
- So that you can pay quarterly taxes without feeling the pinch.
- You won’t be nervous about spending on marketing.
- Because once you know how much your business made and exactly what you spent on marketing, you have powerful data.
- You won’t have to guess what you spend on marketing. You’ll know percentages to help you curb or increase your spending.
Looking at the numbers is not something that most entrepreneurs enjoy. But the ones who want to grow their businesses – regardless of the level they are at – learn to do it. The numbers tell a story. They will empower you as a business owner to make smarter decisions.
So dive in before someone comes knocking with a glass of spiked egg nog.
