Episode Transcript
[00:00:00] Speaker A: Foreign.
[00:00:08] Speaker B: Welcome back to the Total profit podcast. I'm T2 and I'm here with the guy who makes spreadsheets look cool. Tommy P.
How you doing today?
[00:00:18] Speaker A: I'm in definition of cool, but as always, I'll take it. It's good to be back.
[00:00:26] Speaker B: Today's episode is if you don't know your numbers, you don't know your business. And yeah, we're gonna go there. So, Tommy B, take us there.
[00:00:35] Speaker A: This is. Yeah, this isn't about balance sheets and bank accounts. It's about leadership. Because if you're making decisions without numbers, you're gambling, not leading, you know? And why is knowing your numbers non negotiable? Well, your numbers are your business.
You can't improve what you don't measure.
If you don't know where your money's going, you're probably losing more than you think.
Most small business owners wait until tax time to look at their financials and that's way too late. It's. Imagine sitting across from an accountant and you actually know what they're going to tell you and we're going to get you there.
So you need real time data to make real time decisions.
[00:01:26] Speaker B: You do. That's 100% correct. I mean, think about it. Would you fly a plane with no instruments? Okay, so why are you running your business without dashboards? And there's several core numbers that every owner needs to know. So Tommy, why don't you walk us through a few of those?
[00:01:44] Speaker A: Absolutely. You're 100% right. So first one is cash flow. Can you cover next month's expenses? That's a big one.
You know, then there's you. You've got to. You're watching your gross margins.
Are your jobs and services actually profitable?
Net net profit. What's left after everything is paid?
Another one. Customer accusation cost or cac. How much are you spending to win each client? You know, if you, if you're going backwards, it's not a lot of fun.
Another one is customer lifetime value or clv. It's like, are they worth it? Are they nickel and diming you to death? Are they letting you be profitable?
Accounts receivable, turnover, Are you getting paid fast enough?
All these are trackable, but you just have to put that front end effort into to set up those reports.
[00:02:44] Speaker B: Yeah. And if that list just overwhelmed you, that is a lot of acronyms. And yeah, if that was a little overwhelming for you, don't worry. We're going to break it down in upcoming episodes. But today is really just about starting the habit of Paying attention.
So there are a few mistakes that we need to avoid, too. Tommy, what are some of those?
[00:03:05] Speaker A: Yeah, so you can't run your business on your gut. Don't rely solely on what your tummy's telling you. Use data to support your instincts, and it's all at your fingertips. You just have to find it and know how to organize it. And it can be overwhelming, but we're going to get you there.
Don't wait until the end of the year.
Look weekly or monthly at where your numbers are at.
Like, don't delegate financial visibility entirely, because ownership means knowing your numbers, knowing all your numbers, even if someone else is doing your books.
[00:03:44] Speaker B: Right? I remember on a previous episode, you were coaching everyone to set aside about 30 minutes a week to take a look at all of your data.
And, you know, here's something to remember. Data doesn't make you rigid, all right? It makes you ready. It lets you lead proactively from the front instead of reactively. And that's really important.
Your staff and your customers are looking for you to behave that way as a leader.
Quick shout out to our sponsor, Performance Margin. This is the tool that we use that makes knowing your numbers really easy. From dashboards to margin tracking, it's really built for clarity so that you can understand all of this data and these numbers about your business very easily.
So your action step for this week, we want you to audit your own dashboard or create one if you don't have one.
So what are three to five numbers that you'll track down, that you'll track weekly? All right? We want you to write them down, look at them regularly, and then base your decisions for your business going forward on facts, not guesswork, not tell me work. All right? If you don't know your numbers, you don't know your business.
[00:04:56] Speaker A: Exactly. You know, and like T2 said, block out that time on your calendar. It's as important as an appointment with your clients.
[00:05:05] Speaker B: I would agree.
[00:05:07] Speaker A: So thank you for a great week. And always remember, taker. Cool.
[00:05:13] Speaker B: Don't get too excited.
[00:05:15] Speaker A: It's all under control and it's going to be fine.
