Knowledge........What it does to your business

Let's assume your business is ticking along nicely. New customers seem to be popping in your door all the time and everyone seems really busy. So of course it's time to hire a new employee right? And it's only going to cost me the employees wages and super each week so that is no drama.....right? If only it was that easy.

How much would you need to increase your sales by to accommodate this new employee and still have the same profit margin? Are there any other costs that will go up in the Insurance, Phone, Training costs, your marketing costs to attract the new customer. What other equipment do you need to purchase, computer, phone, car? Will you now be liable for Payroll Tax? Will you have to pay PAYG on a monthly basis now not quarterly. How long will it take for the employee to either become productive, bring in new sales or allow someone else in your business to increase either production or revenue?

How many times have we been busy and just decided this must mean I need to hire someone else? Do you think it would make a difference if you knew the answers to the above questions? Do you think the new employee could perform better if they had clear Key Performance Indicators from the very 1st day they stepped into the business?

Let's assume it's not a new employee now but a piece of machinery or equipment. What impact will a new piece of equipment have on your cashflow? What level of efficiency do you need to gain to make the new equipment pay for itself? What additional sales will you need? Should you pay for this out of cashflow, on a long term Lease or Hire Purchase or just add it to your existing loans? How do you budget for the balloon payment? Will the Bank even loan you any money for the new equipment?

Would you be comfortable putting your entire life savings on Black at the casino?

Is making these decisions with no knowledge similar?

So what does knowledge do?

It's simple - it allows you to make informed decisions. It allows you to understand exactly what needs to happen in order for your business success.