The power of knowledge

There is nothing more powerful in business than having knowledge of how you are performing. Combine this with some strategy on improving your performance and you have a killer combination. Check out some of my previous posts on the subject if you want more details:

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

Armed with knowledge on how your business is actually performing not only allows you to make informed decisions it also allows you to work in the areas that need the most work. All too often we are chasing our tail as business owners. We focus our efforts on one area or all areas of our business but don't know with certainty that is where the problem lies. We have to deal with staff, but do we really know how they are performing. Is our business actually improving or is it going backwards? If your business doubles in size can you financially support it? If you don't meet your budget for the next 3 months what will your results show at the end of the year?

So why is knowledge so important again? And doesn't having to gather all of that information costly and time consuming?

Knowledge is the only way you can be sure you are focusing your efforts in the right place..........and gathering the information is certainly not costly or time consuming.

For some time now Growthwise has been recommending a cloud based accounting program called Xero (note we also use this product for our own accounting). We recommend this product for a number of reasons but the main one is the ability to extract information (knowledge) out of the system with up to date numbers. So this morning as an example I can log into a clients Xero file, click 2 buttons and know what they need to invoice before the end of the month to hit their budget. I can click another button and tell them whether they will be short on cash for the end of the month. I can explain which months they seem to make more profit than others and the list goes on. All from the click of a few buttons.

Now I've found a another tool that enhances the information out of Xero even more. Introducing Spotlight Reports - the decision making data tool. For a lot of small business owners looking at a Profit and Loss or Balance Sheet (even with budgets and green or red arrows) is daunting. And it's not powerful enough. Spotlight reporting is graphical based. It allows you to set KPI's and targets and it shows you your progress against those targets. The tool also allows you to project forward......something every business owner should be looking at. Another + with Spotlight is the ability to monitor your non-financial KPI's - all in the one report. Imagine being able to look at the spikes in new customer numbers and measure that with your turnover figures. Or for service businesses what about monitoring your effective hourly rate? If you've got a big team your staff turnover? Or what about your website traffic vs spikes in turnover? Or where your new customers are coming from vs what you spend on each advertising medium?

All of a sudden small business owners can have what the big boys pay big bucks for, without the complex reporting systems.

Imagine the improvements in your business if you had information in front of you each month. Could you make some adjustments to your business right then and there instead of waiting till the end of the year or quarter to have a look at your performance?

Interested in taking your business to the next level and kicking some goals? It's nearly the end of you know what your tax and business position will be at the end of the financial year? Would you like to know? If so let me know.