March is Numbers Month

February 28, 2011 Written by Frances Schagen

Numbers tell the story of your business.  They tell of struggle, triumph, of recessions, weather, shortages and realized opportunities.

Numbers are a language – a very logical one and one without emotion.  We don’t see an exuberant zero or an unhappy negative.  They just are.  We feel emotion when we see numbers because we think of the story they are telling.  But just as with words, we can change the story; we can make the future unfold in a new way.

The numbers in your business, for the most part, are not money.  Money is what we measure to get the numbers, but the numbers of your business represent what is happening in your business.  They are your staff, they are your office with heat and lights, they are the products you have on your shelves, they are your customers (or guests, or friends or whatever you call the people who do business with you).

The numbers in your business tell you what happened.  You can project those numbers forward to make guesses about how things will turn out.  You can try out different scenarios.  For instance, what if you doubled your effort in your most profitable area; or what if you found a less expensive offering; or what if you simplified some of your procedures?

Once you choose the one you like, test it, figure out the business practices you will need to do to make it happen, then follow your plan.  As you go you can compare the actual results with your projections to see how you are doing.

Numbers are a representation of what is actually happening in your business.  They are not important in themselves.  People get into problems when they do things to affect the numbers.  For instance, you may determine that your rent is higher than you feel it should be.  You could move to a less expensive place which will allow you to achieve a lower number on that line but you may find that your sales drop off.  Numbers are only to tell the story, not to be the end in themselves.

Once you get to a profitable enough place to cover all your needs, numbers are a way to keep track.

The numbers of business include your financial statements and we’ll get to those.  They include the statistics of how many and how often.  Then there are the numbers that affect your business such as economic indicators, statistics and market behaviour.  These let you know of potential challenges and opportunities.  We’ll look at some of these numbers this week.

Numbers tell a story.  What numbers have surprised you?  What numbers have given you an insight that helped you?

Know Where You Are Going
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2 Comments
  1. Joshua Joshua
    March 1, 2011    

    This post makes me think of a quote by Nassim Taleb, “Mathematics is principally a tool to meditate, rather than to compute.” The numbers are a guide and tool (a useful one at that).

    One number I’ve found helpful in the last few weeks is amount of time I spend working. Using RescueTime, I can see the when and where I waste my time.

  2. Frances Schagen Frances Schagen
    March 1, 2011    

    Nice quote. Thank you. I like that.

    Good point about time being an important number.