WEEKLY WISDOM - NUMBERS

Numbers:  an arithmetic value used for representing the quantity and used in making calculations

Numbers is a subject that many leaders don't talk about. I was excited to lean into this subject as numbers are more than just numbers. There are stories and information that lie within all numbers. Interpreting the numbers is a leadership skill that every leader should master. Numbers will impact all aspects of the business, including sales, staff, marketing, capital improvements, facilities, and more. As we move further into this subject, please remember what story the numbers I analyze frequently say about my business.

Many leaders avoid or just scratch the surface of their numbers, which can cause a significant gap in making important decisions or strategically understanding what opportunities the business has or challenges that may need to be addressed. This gap can lead to missed opportunities, poor resource allocation, and financial instability. Remember, these all have a component relating to numbers. I've repeatedly learned that the best leaders know their business numbers.

Now, you're probably wondering what numbers I am speaking of. Some are very important in some aspects of your business, but the real deal is interpreting those numbers into real meanings and decisions. Here are some reports and numbers you should know intimately. Balance Sheet, Income Statements, Expense Percentage of staff overhead versus your overall expenses, projected profit margin versus actual, revenue streams, fixed and variable expenses, cash position versus reserves or capital accounts, accounts receivables, and payables. If you can learn and interpret these reports, you will be way ahead of the leadership game. Learn and practice this exercise monthly; the more you learn and interpret, the more insights you will have about your business. I can guarantee that your business acumen will significantly increase, adding value to your skill sets and the company. Commit to this practice, and watch your business thrive.

The examples of numbers you should know include but are not limited to the following. These are not just theoretical concepts but practical tools that you can use to make informed decisions. How much staff overhead should your department or business have compared to industry and business averages? What's your profit margin or net operating income on your Income Statement? What are your assets versus your liabilities on your balance sheet? What are the items that provide a revenue stream for your business? How much does making your product or delivering services to your customers cost? How much is outstanding on what your customers owe you (receivables) every month, and how much do you need to pay (payables) every month? These are not just numbers, they are the keys to unlocking your business's potential.

Lastly, here are some potential stories and outcomes you will have once you understand the numbers and reports. You can find ways to cut costs on your products and services while still providing the same quality, increasing your profit margin. This lens is about understanding the present and shaping a better future for your business. Ensure your accounts receivables do not stay on your books for over thirty or sixty days. Hit the sweet spot on the number of employees and the benefits you need to operate your business according to industry norms. How much cash do you have on hand to cover petty expenses? This information just scratched the surface, so go all in and watch your business grow, thriving in the knowledge and power that comes with understanding and interpreting your business numbers. As you study these numbers read Luke 16:10-12.

Exercise Your Power this week-

1.     Review your own personal financial numbers and make the necessary adjustments to

make sure you’re in a growth position for you and your family.

2.      Determine one financial area in your business that you need to be more informed

about and then obtain the necessary information to ensure that you understand it

thoroughly.

3.     Select someone in your organization that you believe would benefit from understanding

your financial numbers more and have a session with them about the finances.