The Truth Will Set You Free
This bookkeeping article will discuss the unfortunate fact that many business owners are unwilling to face the truth revealed in their bookkeeping. Assuming the numbers are accurate, the numbers don’t lie. They admit of no excuses. They are the facts.
To succeed in business, the business owner must face the truth and seek to improve on what the numbers reveal. The numbers will keep you ‘honest’ but only if are willing to take personal responsibility for the result.
This is the importance of having a good bookkeeping system – to measure and monitor your performance. But bookkeeping is only important if you are willing to act on the results.
When your business is under-performing, it is very easy to let yourself off the hook by making excuses. You rationalise the result by saying that ‘we are in recession’, ‘everyone else in my industry is suffering’, ‘no-one has any spare money to spend’ etc. This is a fatal mental trap.
You have effectively surrendered control to external circumstances which are outside your control. Psychologically you have given yourself permission to fail. This is an uncomfortable truth to admit to yourself … but it is the truth.
If your sales are falling short of target or breakeven or whatever your benchmark is for success is, it is important to understand that your previous activities and behaviour have to change in order to change the result. Change is not an option – it is a necessity.
Instead of making excuses for under performance, decide what changes are required, set your goals, monitor your performance against those goals and review the revised results. Bookkeeping plays a prime part in that whole process.
For example, to increase your sales, you have a large number of options:
- There are a large number of marketing activities you can undertake both offline and online to increase the number of customers of the type you want. If you are really bereft of marketing ideas, you shouldn’t be – the bookshelves are groaning with information.
- Alternatively, why not work on strategies to increase the number of times your existing customers return to do business? Most businesses do not communicate enough with their customers. If you don’t have a database with their contact details, make that a priority.
- Work on strategies to increase the average sales value of each transaction – make special offers, bundle goods and services together – be creative about the ways in which you can help your customer to buy more of your goods and services.
Preferably you will be working on all three of the strategies above.
However, it is important at the outset that you already know how many customers you have, how many times they return to do business and what the average transaction value is. If you don’t have the numbers, how can you know you are improving?
By facing the numbers, the truths they reveal will set you free.
In order to face the numbers you need a bookkeeping system that:
- Is easy to use and understand – you cannot fully delegate this job.
- That produces accurate information i.e. is kept up-to-date, balances and is reconciled frequently with the bank account and petty cash. If you do not trust the information, you will not use it to manage your business.
- That delivers information in a format that is meaningful to you.
If your bookkeeping system does not match all those criteria, then change it now. If you don’t, then you cannot face the numbers and the truth cannot set you free.
If you need to be ‘set free’, why not take a look at my bookkeeping system?
If you would like me to help you with your web marketing then take a look at Web Marketing Machines.
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