My least favorite part of buying a car is when they “run the numbers.”
My least favorite part of buying a car is when they “run the numbers.”
Primarily because I always feel like I have NO IDEA what those numbers should be, and what they should include. Added on to that, cars that used to cost eighteen thousand dollars now cost thirty thousand dollars because there are so many electronic parts. Chances are good that if you call me and I’m driving and my Bluetooth picks up I will tell you I’m driving the spaceship. That’s what it feels like. And I’m not an astronaut. What if something breaks? MORE NUMBERS!
There are about six analogies and metaphors up there but I’m only gonna unpack a few. First: Why care about numbers? Numbers can help us make decisions. They can be benchmarks. They help us see where our business is and give us some goals for where we want our businesses to be.
A lot of emotions are tied up with money, the primary way most of us deal with numbers. What do we “think” something will cost or should cost? How much are we willing to part with to solve a particular problem? At what point do we feel like we’re charging enough for our work? What number in the bank account would make us “happy”?
That’s all emotional stuff. It doesn’t really matter.
The way one person feels about five thousand dollars is the same way I might feel about fifty dollars.
Instead, tackle this: Define what the numbers should be.
The “good” numbers for your business (leading to profitability and work-life balance) depend on your goals and which numbers you’re looking at. I’ve been defining numbers for my business so that when opportunities come my way, I can correctly evaluate them. An opportunity is not necessarily good because it will make me some money. It has to align with my goals and my numbers.
Some of my numbers:
2: The number of books I can work on publishing simultaneously.
30 percent: The amount of each check I have to put in my tax account so I don’t freak out when it is time to pay estimates. If I have extra left over, I can take a vacation or redo my bathroom.
5 dollars: The average value of an email address for a business operating an ecommerce site.
10: The multiplier of revenue I need to eventually get from the investment I make to go to a conference or trade show. (This is a long tail investment.)
5: The number of days in a row I can work before I need to take days off in order to remain productive. (Otherwise known as a “weekend.”)
Some of these numbers might not seem like hard numbers you’d find on a P&L, but they’re numbers I honed in my own business experience so that I can get the most out of my business and my life.
There are a lot of ways to twist numbers by leaving things out of reports, by not really paying attention to them, by attaching emotion without standards and benchmarks. WE ALL DO IT. Don’t beat yourself up if you do it. Just figure out a way to back away from that method of evaluating numbers.
Before you can use numbers to evaluate whether your business is on track with your goals, you need to know what the standards are, what your goals are.A sheet of numbers is meaningless if you can’t evaluate them against goals and intent. Five thousand dollars and fifty thousand dollars might as well be the same thing if you don’t have a way to measure what you’re getting when you spend it. What is the standard in your industry? Do you meet that? What is your standard? Are you meeting that?
If you spend ten dollars on Facebook ads, what should you get for that spend? (You could have any number of goals: Facebook likes, clicks to website, emails added to your list. Don’t spend money without knowing and understanding what you should get from spending that money.)
If you’ve never thought about your numbers, start writing some down and researching, evaluating, and honing them.
If you don’t understand what your numbers should be, find someone to help you figure them out.
Second: Why care about numbers? Even if you don’t care about numbers or pay attention to them, eventually someone who has some kind of sway over you will.
Whether that’s a loan officer signing off on a mortgage you need for your house or someone in your company higher in the food chain than you with the ability to control your budgets, at some point, the numbers you deal with will become relevant to your ability to continue to live your life and do your work.
You gotta know them, understand them, be able to reasonably defend them, or make changes when they really don’t add up to your stated goals and objectives.
Bookmarks of the Week
Dialect Quiz
This is really interesting and you’ll learn about the different words residents of various geographic locations use for things like a highway/freeway/interstate. Apparently I talk like I live in Oklahoma. I’ve never been to Oklahoma. (I have, however, lived all over the US, and I guess I’ve picked up a lot of different words here and there.)
Talk to an Expert
Want a second opinion? On Clarity.fm you can buy phone time by the minute with experts in every industry. You can even talk to Mark Cuban from Shark Tank. Guess what his number per minute is?
Why You Aren’t Taking Action
A phenomenal episode of Amy Porterfield’s podcast. It’s all about how changing your thoughts leads to changing your feelings which leads to changing your actions which leads to different results. Truly, if you do one thing for yourself this week, listen to this. They start right off with, “Busy isn’t the same as productive.” I can’t say enough good things about this.
Regardless of age, everyone wants to be valued
There’s a whole lotta talking about this generation vs. that generation online, in networking groups, in the news. This article from the Harvard Business Reviewgives great ideas about how to get past the generational labels, as well as some nice tidbits about change management.
My subject line is a Harry Styles tweet from back in the day. Me, I’m a writer. I was told there would be no math(s). (The British way of saying it.) I also thought I’d be doing something completely different with my life. At this point, though, I wouldn’t change a thing.
Have a great weekend everyone!
