My Dad – and current Chairman of J-Flex – has often used one particular phrase when it comes to decision making, and not just decision making relating to the business, it can also be applied to your own personal lives and finances.
It seems quite a fitting time to share that phrase, considering the current situation relating to coronavirus, as I genuinely feel that it’s up there with the “best business advice” you can get. It probably also explains my [unhealthy] obsession with detail (according to my Insights Discovery profile).
So what is that phrase, I hear you ask…?!
Always Know Your Numbers!John Kirk (my Dad)
Now we may not always agree on everything, however this is one of the best bits of advice he’s ever shared/and that I’ve ever received, and given that cashflow is the biggest challenge that an awful lot of businesses and households are now faced with it seemed appropriate to share that advice.
It’s worth noting that we’ve made some pretty big alterations in the last 6 months (having recruited a new Head of Sales and a new Head of Finance) and both of these new colleagues demonstrate the value in knowing your numbers. Rather than taking a monthly view on sales, we are now looking at quarters (which then make up our 12-month forecast). That, combined with revised financial reporting (which includes a cash projection based on 3 assumptions; no sales, some sales, lots of sales) has helped us to formulate plans to navigate this challenging period, including when to utilise support made available by the Government.
Now this may sound obvious to some, but for others (like us, until recently) it’s completely alien!
The great thing about this advice is the fact that it is versatile. Not only can you apply it to business, you can also use it at home – and yes, for those of you wondering, I do have a personal finance spreadsheet. How else could I sanction the subscription to Netflix or Disney+?!
Joking aside, the spreadsheet allows us to understand what we can/can’t afford in life, and that’s important. For some reason an “entitled” attitude has been allowed to breed in the UK, and that means that some people are taking the “f**k it, we can’t afford it, but why should we miss out” approach. Then before you know it, they’ve racked up a ridiculous amount of debt, the credit card doesn’t get paid off (whilst all the time it’s accumulating interest) etc etc.
Where does the problem stem from? Education seems the most plausible of reasons – we certainly didn’t learn about money/financial stuff at school, and business studies was only an optional subject during the latter years of secondary education. Mind you, that was closer to the 80’s than present day, so things may have changed since (although I have some doubts).
There’s also an element of ‘one-upmanship’ that contributes to the problem too – and that’s not helped by people showing off what they’ve got on social media either. Seriously though, who actually cares if you’ve got a big house or a flash car or the latest fashion labels???
Anyhow, I’ll get off my ‘high horse’ for now.
Remember this though; we’re all likely to be faced with certain decisions over the coming weeks and months – whether at work or at home – these are strange and unprecedented times after all. However, by knowing your numbers and understanding the implications when you change those numbers, it makes decisions easier to make.
So, what’s the best (business) advice you’ve ever received???