How To Be Moderately Successful.
Building a business is hard.
Maintaining healthy relationships with those that you care about is hard.
Staying fit and healthy in your body, your mind and your emotions is hard.
This podcast is about finding and sharing tools, strategies and experiences that may help you to achieve and maintain moderate success in your life, whatever that means to you.
There is a ton of content created by the billionaires, the ultra successful athletes, and by people that are at a level that the vast majority of us will just never get to. And if you're anything like me, you're totally okay with that.
This is a place where we talk about how to build a great business, but not necessarily a massive one. A place to talk about how we build a life that is balanced and integrated, but not necessarily optimised to levels that are not realistic for most of us.
In short, it's a place where we explore how to be moderately successful.
The work will always remain yours, and for the most part, it's simple, but not easy.
I sincerely hope it's valuable to you.
-Mike
If you want to talk about working with me get in touch on mike@smbmastery.com.au or https://www.linkedin.com/in/mikeadamscott/
How To Be Moderately Successful.
EP32 Know Your Numbers! With Chris Wheldon.
In this conversation, Mike interviews Chris Wheldon, an investor and entrepreneur, about the importance of understanding and analyzing numbers in small and mid-sized businesses.
Chris shares his experience in acquiring and investing in businesses and highlights the key metrics he looks at, including cash flow, profit, margin, cost structure, and return on capital. He emphasizes the need for business owners to have a strong grasp of their numbers to make informed decisions and ensure the sustainability of their businesses.
The conversation also touches on the value of data transparency and the benefits it brings during the acquisition process. Understanding and analyzing financial metrics is crucial for business owners and managers. It is important to measure the inputs that contribute to revenue and profit on a weekly basis, such as sales, marketing, and customer retention metrics. Monthly measurements should focus on understanding sales trends, cost structures, and budgeting for future expenses. Quarterly analysis should provide a full picture of financial performance, including working capital changes and cash flow generation. Annual reviews allow for a deeper understanding of the balance sheet and the true financial profile of the business.
The key takeaway is that while the numbers are important, they are a reflection of the decisions and actions taken by the business in serving its customers and stakeholders.
Takeaways.
- Understanding and analyzing numbers is crucial for small and mid-sized business owners to make informed decisions and ensure the sustainability of their businesses.
- Key metrics to consider include cash flow, profit, margin, cost structure, and return on capital.
- Having a strong grasp of numbers allows business owners to negotiate better deals and demand higher prices when selling their businesses.
- Data transparency and access to high-quality information are indicators of a well-run business and can attract potential investors.
- Focusing on both input metrics (e.g., lead generation, customer activity) and output metrics (e.g., financial performance) is important for monitoring business performance.
- Regularly reviewing and analyzing numbers on a weekly, monthly, quarterly, and annual basis provides a comprehensive view of the business's health and progress. Measure the inputs that contribute to revenue and profit on a weekly basis
- Monthly measurements should focus on sales trends, cost structures, and budgeting
- Quarterly analysis provides a full picture of financial performance
- Annual reviews allow for a deeper understanding of the balance sheet and financial profile
- The numbers are a reflection of the decisions and actions taken by the business
Chapters
00:00
Introduction of Chris Weldon
03:04
Chris's Background and Current Venture
07:37
The Problem: Lack of Understanding of Numbers
13:08
The Importance of Knowing the Numbers
15:56
Key Metrics for Assessing a Business
22:21
The Owner's Understanding of Numbers
24:58
Metrics to Monitor Weekly
27:10
Metrics to Monitor Quarterly
32:20
Understanding Sales Trends and Cost Structures
36:46
Analyzing Financial Performance Quarterly
44:04
Deepening Understanding of the Balance Sheet Annually
46:08
The Numbers Reflect Business Decisions and Actions
Find out more about working with me. mike@smbmastery.com.au or https://www.linkedin.com/in/mikeadamscott/