How do you assess financial performance? It’s not that straightforward, isn’t it?
Knowing how to judge your financial performance can be tricky. It’s because many factors come into play. Plus, it’s not always easy to know where you stand.
You can get a good idea of how you’re doing if you turn to your numbers – more specifically, your income and expenses. Take a careful look at them, and it should be much clearer where your business is at the given time.
In the words of Dietrich Bonhoeffer, “Action springs not from thought, but from a readiness for responsibility.” So, to be able to lead your company to a brighter tomorrow, you need to be informed about the facts, take responsibility for the current situation and plan away based on reasonable data.
Care for some tips to get you started? Read on to learn more.
Know your income and expenses
If you’re running your own business, it’s important to keep on top of your financial performance so you can make sure you’re making a profit. But how do you know if you’re doing well or not? Here are a few tips on how to judge your financial performance.
Regardless of whether your business is a private commercial business, an arts and social business, or a charity, whatever type of business it may be, your money and finances are the single most important thing. Why? Because if you want to stay in business, you’ll need to be generating money. It’s as simple as that!
Money i.e. financial returns are an absolute necessity from a practical point of view. It certainly isn’t the only thing – it’s not your only reason for pursuing your business. But it’s got to be factored as one of your key objectives.
We’re all in business to deliver something valuable to society, as well as to make a living. But if you don’t aim to make money in your business, you will not be able to deliver your why. You won’t be able to sustain yourself and get those financial rewards that you deserve. On top of that, you won’t be able to build up a business that can have big impact. Lack of money is going to lead to your eventuality.
That’s why, in this video, I’m going to outline how we make judgements, how we know how we’re doing in our business and how we can measure our success.
To summarise
So, if you’re looking to make money, knowing how to judge your financial performance is a priority. Remember to keep an eye on your profits and cash flow. And don’t forget that there are other important numbers to watch as well! To learn more about what they are and how you can use them to measure your success, check out this video where I talk all about it.
In the meantime, join me in my Numbers Know How Financial Story Plan Community where we’ll continue this conversation and help each other achieve our financial goals.
Sign up for your FREE trial to Numbers Knowhow, the revolutionary cashflow software designed to empower you with the numbers you need to transform your business. With Numbers Knowhow, you’ll have access to powerful tools and features that will unlock a world of financial understanding and growth.