Friday, June 27, 2014

Use These 10 Numbers to Manage Your Business


Use These 10 Numbers to Manage Your Business




How is your business doing?  Can you explain to others what is happening in your business?  It is important that you know what is going on in your business and be able to tell others a story about it. Watching your business results keeps you informed and by having regular reviews with management it keeps everyone sharp in regard to their own performance because they know you too are watching.

Here are 10 things to watch/manage in your business:
  1. First and foremost how much profit are you making that can go in your pocket each period and each year?
  2. How much are you selling or revenue are you generating?
  3. What is your cost of production?
  4. What are your operating expenses?
  5. How much do your customers owe you and who and how far are they behind in paying?
  6. How much do you owe your vendors and how are you going to pay them?
  7. How much do you have in assets to run your business and do you or will you need to add assets or replace/upgrade and when and how will you fund the purchases?
  8. How much debt do you have and what are your monthly payments and how are you going to pay them?
  9. How much capital do you have available to invest back into the business to grow it and take advantage of opportunities?
  10. How are your business results going to result in taxes owed for your business and you personally and your investors?
When looking at your business performance you will want to have perspective relative to history and to your industry. You get this by comparing the results for the period against the prior period and the prior year.  You also want to know where you are for the year and what the trends are. You can research what the standards are for different measurements for your industry and compare them with your results.

Be prepared by closely and regularly monitoring your business results and be able to communicate the results with others.  You want to be prepared to seize opportunities that present themselves and catch problems early on and address them.  In addition you can set expectations for your key employees and monitor their performance and review it with them.  

Putting together the numbers and gaining a relevant perspective can be a real challenge.  The CPA Superhero has been helping clients manage their business with regular reviews for many years and I can help you too. Feel free to use my contact information below to schedule a time to discuss your situation.



Jeff Haywood, CPA
The CPA Superhero
972-439-1955
jeff.jhtaxes@gmail.com

Follow the CPA Superhero on Twitter too at:
twitter.com/jeffhaywoodCPA


These posts contain general information that does not fit every situation, they are not all inclusive, and as always for your tax situation everything "depends on facts and circumstances."  In addition, the world and IRS requirements are always subject to change.  So call me to talk about your specific facts and circumstances and what you want to accomplish.