The 5 Financial Questions To Ask
It’s time to know your numbers!
We totally get it: the numbers can seem scary. But take a breath!
We're going to walk through your financials step-by-step together. Trust me: it's not as scary as you think. In fact, it's a pretty fun puzzle. You need to figure out what's working for you and what you need to fix.
The key to financials: Try not to judge yourself. The numbers aren't always what you want. That's okay! Your job is to make them better.
1.Are you spending more in one area?
That's okay as long as it gives you a good return. Marketing will be your biggest expense and it brings in the most sales. Be careful of overspending in other areas. Do you need an office? Did you hire too many employees? Is there a cheaper way to produce products?
2. Are your expenses larger than your revenue?
You're losing money. That happens sometimes, especially in the beginning. The simplest solutions are to reduce your expenses and increase your revenue. Try adjusting prices or finding new revenue streams.
3. Are you taking in a lot more collections than cash?
You need more cash to invest in your business. Do you have enough to pay your bills each month? Can you encourage customers to pay in cash?
4. Are you spending a lot more in collections than cash?
This makes things easier in the short-term but it's more expensive in the long-term. You'll pay interest and fees. Can you pay in cash more often?
5. Are you growing each year?
Take a look at your revenue, expenses, and profit. Is your company headed in the right direction? What decisions did you make and did they help you grow? What changes can you implement this year to increase your growth?