Today we’re going to be talking about embracing ‘the suck’ in entrepreneurship, and what many business owners consider to be ‘the suck’ is numbers. While 40% of small business owners state that bookkeeping and taxes are the worst part of owning a business, we believe that this is key to your business’s success, and that not knowing your numbers is the silent killer of small businesses. In today’s episode, we discuss some of the mistakes we made in the early years of entrepreneurship and what lessons we learned the hard way when it comes to budgets, taxes, and knowing where we stand. We talk about how hiring a tax expert can help you save money, why you need to determine where you are before you can understand where you’re going, and the importance of running cash flow positive. To find out which numbers you absolutely have to know as a business owner and other helpful tips, resources, and business growth hacks, tune in today!
Key Points From This Episode:
- An introduction to today’s topic: knowing your numbers.
- Some surprising statistics about small businesses and entrepreneurship.
- Thoughts on the phrase “saving money is not making money”.
- Some of the mistakes Andrew regrets from his early years in entrepreneurship.
- How hiring an expert when it comes to your taxes can help you save money.
- Why you need to determine where you are before you can understand where you’re going.
- The importance of running cash flow positive.
- One of the numbers you need to know: revenue, and how this is different from profitability.
- Why you should pad your budget for miscellaneous expenses.
- Another number you should know: cashflow.
- Why Andrew bases his financial decisions not on money in the bank, but positive cash flow.
- A business growth hack: Use software like Quickbooks or Freshbooks to know your numbers.
- Other resources for knowing your numbers: Bench Accounting.
Tweetables:
“What I learned is that [the IRS] is not as scary as you think, as long as you talk to them. If you try to hide in the corner and hope that your problem is going to go away, it’s only going to get worse.” — John Kelley [0:08:10]
“Before you even make a plan on where you’re going to go, you need to realize where you are because that’s going to determine the steps you need to take to get to that goal that you’re setting or to even determine what the goal is that you’re going to set.” — John Kelley [0:13:19]”
“I think that’s the biggest importance of knowing your numbers, if you want to grow, you want to scale, you’ve got to understand where you currently are.” — @abrockenbush [0:13:42]
“I think the bottom line in today’s episode is if you take the time to sit down, understand your numbers, and spend some time looking at that profit and loss report, that really is your best friend as a business owner.” — @abrockenbush [0:29:21]
Links Mentioned in Today’s Episode:
