Putting off the To-Do List
There are things we all avoid. Overdue medical bills, mowing the lawn, laundry, maintenance on the car… but these are chores— things we know we have to do but don’t want to get around to. Usually, they involve boring or unpleasant experiences. Hanging out at the dealership for 2 whole hours with terrible WiFi. Folding the same clothes over and over again. Pulling the lawnmower out from behind the car and 2 tricycles. Did I mention cleaning the garage?
Just like car maintenance and medical bills, eventually avoiding certain things will catch up to you. Maybe you will be lucky for a while, but maybe that car you never took to the auto shop will finally break down in the Arizona desert with a very sad and hot family asking why you never took your car in to get looked at.
Don't Avoid Checking your Business’s Numbers
Not looking at financial data can and frequently does have catastrophic results. If you run out of cash and your vendors can’t or won’t give you a break, then you’re out of business. If you have no more money, you can’t make rent or pay your employees. As a business owner I know you, like me, have had that nightmare. And probably more than once. Cash, as many a small business help book will tell you, is king (or queen!). No cash, no business. Unfortunately, it’s that simple.
So how do you not run out of cash? Well, know how much cash you have, know what your expenses are, and know what your revenue is. Simple, right? You probably, at least generally, already know these things. The devil isn’t even in the details! The numbers you need are pretty straightforward, but things get tricky when they change unexpectedly and you don’t know until it’s too late.
It may be a gradual shift over time—maybe your product costs or labor costs have crept up over time, but your revenue hasn’t. Maybe your customers have been taking a few days longer each month to pay or a major customer is suddenly 6 months behind on payments. “Wait!” you say. “6 months isn’t sudden.” You will only know if it’s happening if you were checking the books regularly. If you only look at your books every 6 months, then yes, it might take you 6 months to notice. And in that moment it feels very sudden and very scary. Why aren’t they paying? Are they in trouble? Will they pay? Is this why my accountant had us apply for a loan?
Numbers Your Business Should Look At
You should never put yourself in a position where you’re surprised by your numbers because you avoided checking them. But also, you don’t need to spend your nights and weekends pouring over those numbers. Make a list of the numbers that have surprised or panicked you in the past along with a few you want to know. Things like:
- Revenue: Anyone else think it’s fun to hit refresh every couple of days during a good month?
- Travel Expense: Need I say more?
- Payroll: Try seeing what payroll was this month last year.
- Marketing Spend: We know those ads can get out of hand!
- Cost of Goods Sold: Cost of your product.
- Cash: Yeah, that…
- Accounts Receivable: Money customers owe you.
Once your list is complete, sign up for the AutoCFO app. Go ahead and set up 1, maybe 2 dashboards (hey we get it, it’s been a rocky year), then a calendar reminder with a link to the AutoCFO dashboard reminding you to login every 2 weeks to take 10-15 minutes to look at your dashboard. 10-15 painless minutes once every 2 weeks to avoid disaster for your business. Seems pretty reasonable, right?