Categories: Entrepreneur Tips

The Only Number That Matters

Today’s blog is going to be short and sweet. I often talk about your goals and how you should set them, review them, measure them, and so on.

Today I am going to tell you one of my goals – but it’s about helping you!

In a business, there is really only one number that matters: your cash balance.

This is why many, many small business owners simply manage their business by looking at their bank account.

Even when they have lots of other data to look at.

Of course, this is missing a lot of the nuance and important data, and this approach is generally given the frowny face by business consultants.

But at the end of any business day, the test is always the same – is more cash coming in than is going out?

If the answer is yes, then all is good. If the answer is no, then we’ve got problems.

So why don’t more business owners spend more time focusing on really understanding this? Because it’s a bit harder than it looks and requires looking forward as much as backward and looking forward is a lot harder.

OK, so why don’t more accounting firms like ours spend more time scrutinizing cash flow and helping look forward for clients? Well, because it’s hard and most aren’t any good at it.

Well, that, frankly, is a stupid answer.

And my plan is for us to do better – a lot better. Keep your eyes peeled here for announcements in the not-too-distant future.

We’re going to be adding some things here soon, including pro-active cash flow management. Cash flow IS the most important thing for any business to monitor, project, understand, and respond to on a continuous basis.

We can do more here. We will be doing more here. A lot more! That’s my goal and I will be holding us accountable!