Would you like to know the number one skill for entrepreneurs? Well it's the same one that all CEO's need - to understand the company P&L and Balance Sheet. Right about now some of you may be grumbling. Some may even be thinking that you are no good with numbers and that your dreams of being an entrepreneur are crushed. I ask that you not be so mellow dramatic and if you are freaking out, then you need to first focus on your mindset shift before you can go any further.
The truth is you need to understand the numbers whether you plan on keeping your business at six figures or grow it to eight figures and beyond. In fact understanding the numbers is a key strategy employed by GE in its leadership academy. And you all know that there have been more CEO's to come from GE than some of the top business schools combined! The numbers help you to fully understand and therefore influence things like, your margins, business cycle, purchasing trends, overall sales, expenditures and so on. In essence it gives you full control over your companies and therefore your own success.
So what's the first step to understanding the numbers, if you are numbers challenged? Rest assured you do not have to go back and get your MBA. In fact the easiest way is to start by pulling out the spreadsheet or Quickbooks report and look at the basics, profit and loss. Look at where all the money comes from, when it comes in and where it all goes. If you are really intimidated enlist the help of your CPA or bookkeeper, they love numbers. Ultimately, you need to grow comfortable looking at, working with and understanding those numbers - regardless of their size.
It's time to face the numbers. Go, pull those reports and start studying!
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