If you want your business to have lasting success, you must care about the numbers, and use those numbers to grow your business in a healthy and profitable way.

I know.  Accounting and finance is perhaps your least favorite business function, and most likely your weakest link.  While your customers are expecting a lot from you, your business can’t thrive unless you allow accounting and finance to be important too.

Every business, no matter the size, has three main functions. 

  1.       Marketing and Selling – Many will argue that marketing and selling is the most important business function. Hence the old adage that “nothing happens in business until something is sold.” I would agree, the first thing that must be working well in business is marketing and selling. But is it the most important for lasting success?
  2.       Production and Delivery – Others will argue that production and delivery are more important. Once it’s sold, if you can’t produce it (whether it’s a product or service, doesn’t matter) and deliver it on time, there won’t be any more sales.  Yet again, it’s not the most important thing if you don’t have the third function in working order.   
  3.       Accounting and Finance – Many accountants contest that accounting and finance is the most important function. Even if you sell it, produce and deliver it, if profitability and cash flow of the business is not understood and maintained you’ll be bankrupt before you can sell and deliver much of anything.

So, which of the three business functions is the most important? 

The answer is none.

All three functions have to be strong and working together if you expect your business to succeed and thrive. That’s why it’s so hard to build a business that lasts. 

You probably started your business because you were really good at either marketing & selling or at production & delivery of your product or service. But being strong in one major business function is simply not enough. 

I get it, it’s really hard to keep all three balls in the air. I personally struggle with marketing and selling. As a CPA and finance guy, it doesn’t come easy. But I know I can’t put my head in the sand and ignore it. I can’t rely solely on word of mouth if I want my business to grow to the levels I desire. So I rely on professionals to guide me, outsource to, and keep me accountable in that area.

You’ve got to know your numbers.  It’s as plain as that.  

It doesn’t matter if you market and sell with the best of them. If you only focus on your top line revenue growth, you will go bankrupt. If you put no time and effort into understanding gross profit on each sale, net profit for the business as a whole, and managing a positive cash flow, eventually you will find yourself with no cash in the bank and a failing business.

Top line revenue growth is vanity, gross profit is sanity, net profit is reality, and cash flow is life! 

Yes, cash flow is the lifeblood of your business. No cash, no business. No cash, no more selling, production and delivery.  

To learn more about cash flow, download our infograph on how it all works together for the health of your business.

And if you’d like to know more about how Financial Optics can partner with you for business success, fill out our “Get Started” form today!