KNOW YOUR NUMBERS!
Whether you're simply venturing out on a new brand journey or completely building a business from scratch, it's imperative to know your numbers. This means understanding your current, future and expected valuation.
When you know your numbers, you can create a roadmap for where you want to take your business.
Here are a few reasons why you must know your numbers:
1. Helps with Budgeting.
When you know your business costs and how much you are generating in gross sales and revenue, this will help you to set a clear picture for growth. Every business owner wants to reach a place where they realize revenue at the end of the tax year. Without setting strict budgeting plans for your business, you may overly spend on things that have no power to help your business grow.
2. Helps to Determine Contribution/Equity.
As you start building your business/brand solo or with a partner, tracking your numbers (costs, revenue, value of tangible and intangible assets, value of contributed expertise and products, etc.), will help you to build a picture of how much equity is growing in your business. It will also help you create a picture of partnership contribution if there's more than one owner in the business.
3. Helps to Raise Capital.
People want to invest in a business or idea that will make money. If you have kept a clean and clear budgeting plan illustrating your growth by showing rises in revenue every year, it will be easier for you to raise capital to further build your company. Simply, you will have more business credibility to these financial institutions or independent companies that you're seeking assistance from.
No matter what type of business you create, it's important to know your numbers. When you do, it helps to provide freedom in business as you can move with confidence.
This article is a service of SL DeBarros Law Firm, LLC. We offer a wide array of business legal services and can help you make the wisest business choices throughout life and in the event of your death. We also offer a Business Protection Start-Up Session or a Business Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.