Why Do You Need Data To Grow Your Business?
A lot of people get a little intimidated when they hear the word ‘data’, but I promise it’s not scary! Knowing exactly what your finances are doing will make a HUGE impact on the success of your business.
If you don’t know what’s going on in your bank account, you don’t know what’s going on in your business.
That’s a hard pill for a lot of entrepreneurs to swallow. We feel like we are putting EVERYTHING into working in our businesses. The problem is, we neglect to work ON our businesses!
You might be feeling a little defensive about this. You’re spending all your time building a business. When are you going to have any spare moments to check in with your bank statements?
But the harsh truth is: Your data tells the story of your business. The question is – Are you reading the books?
I used to be broke
I’m not some holier-than-thou Guru who lives by the ‘Do as I say not as I do’ mantra. I’ve been there in my own business.
I started my entrepreneurial journey with a quick-service franchise restaurant.
I was completely in the trenches, working 10-12 hour days. I was working completely IN my business and had no ideas what was going ON with my business. I had no idea what my data was telling me.
My mindset told me that to make a profit, I had to be there all the darn time. Working myself to the bone. “If I just work harder…if I just work longer…” An extra hour today, an extra day this week.
I knew I was broke. I just didn’t know why. Because I had never considered that I needed to know my data.
Laying in bed at night, stressed that payroll would bounce in the morning. Deciding that the answer was just to work harder.
Eventually I ended up being served an eviction notice by my landlord. I knew it was time to go to the bank to borrow some more money.
How I learned to review my data
If you think the bank is just going to hand over money to businesses left, right and centre, then you’re in for a shock!
Before they would lend me anything, they wanted to see my profit and loss statement and my balance sheet – and I couldn’t produce them. I didn’t have the first clue how to make one.
Google was telling me to get my bookkeeper to do it – but I was holding an EVICTION NOTICE! There was no way I could afford someone to do this for me. I had absolutely no financial organization process at all.
I needed that loan – it was going to be my lifeline. So I taught myself how to organize my financial business data and create those reports! It took a lot of online study, but I did it.
And let me tell you, when I knew what my data was telling me, my entire world changed.
Why you need to Know Your Numbers
When I reviewed what my financial data was telling me, I realised
- 56% of my costs were on food
- 42% of my costs were on payroll.
Even without being a math genius, it was finally clear why I couldn’t make my rent payments.
Once I knew my data, it was like the solution to my problems jumped off the page at me. I knew exactly where I needed to make changes to reduce my costs. I went in and cleaned up both of those expense areas, and all of a sudden I was making a profit.
If it doesn’t make money, it doesn’t make sense
I started making a profit without increasing my revenue. Purely because I took time to learn what my data was telling me.
It’s almost become a badge of honour amongst entrepreneurs that we earn our stripes by working longer and harder, not by working smarter.
I want you to start working smarter, and get to learn your data!
Numbers DON’T LIE!
Your data is fact. There’s no grey areas – only black and white. When you take the time to learn what your data is telling you, you will find a clear way to make your business profitable.
So often we are so far into the weeds of running a business that we don’t make the time to organise and review our finances.
I stepped out of the ‘work harder’ mindset and started working smarter by making strategic decisions for my business. The only reason I could do that was because I knew what my data was telling me.
Your data tells the financial story of your business, so let me ask again – Are You Reading The Books??
How can you review your data?
You know why I want you to understand what’s going on with your financial data, but you might not have a clue where to start.
I want to give you the exact steps to take.
First, schedule time in your calendar to meet with your bank. This doesn’t have to be your actual bank, by the way. Just looking through 3 months or so of bank statements, on your phone or computer or even the paper statements, is enough to give you a clear idea.
Just make sure you book time in your schedule to sit down and actually look at your data.
The idea of reviewing your data might have you lying awake at night, stressing about what you will find. But I promise you, the positive impact it will have is life-altering.
Once you’ve gotten into your bank statements and have the data in front of you, you need to make a clear record of your revenue and expenses. My free Profit Plan tool is going to be a lifesaver when it comes to reviewing your data. It will help you organise your numbers, and once that’s done the solution is going to jump off the page.
Growing your business with data
I hope the information in this post gives you a clear understanding of why you need data to grow your business. Check out my YouTube video here to watch me talk through this in real time.
Try to make sure you keep on top of your financial data so you always know exactly what it’s telling you.
The impact it’s going to have will be astronomical.
Check out my website to learn more!