Tag: By The Numbers

Why Do The Numbers Matter In Business? 🔢

Posted on by brianjpombo

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Brian talks about the importance of numbers, as he helps a friend sell their business.

Transcription

Why do the numbers matter in business?

Hi I’m Brian Pombo, welcome back to Brian J. Pombo Live.

If you own a business, if you run a business, if you are the main person in charge, one of the toughest things to deal with for most people that get into business is keeping track of the numbers.

I’m working with a friend selling her business. And I’ve worked at purchasing businesses before.

The most common issue that I’ve seen over and over and over again with business owners, especially ones that are looking to sell, is that they did not keep close enough track of the numbers.

Most of the time, I would say it’s not like just a little bit not keeping track, they really did not keep a track of the numbers. They’re gonna have a very specific situation of business, I was looking at purchasing here locally.

We were looking at the back end of her business, she can pretty precisely detail income coming into the business about how much money she’s making on each different sector of the business. She even knew how much money she’d be able to make off of other things that she had done in the past or that she knows other people that have done.

If we added these on, you’d make this much more money from the business. She could kind of guesstimate slightly what the expenses were, but could not give me a number by number, how much it would cost. Even a general estimate from month to month or year to year of how much it costs, expenses-wise.

So she had the end really figured out. She couldn’t calculate the out. And I think it was a lot of personal issues that she was going through at the time that she didn’t feel like she had the bandwidth to be able to sit there and really crunch the numbers she was really looking for, for a quick sale.

I think because of that she wasn’t able to do it. But because of that, also, I wasn’t able to move forward because I was bringing in other investors, I wasn’t looking to put it all down myself, I was looking to bring in other investors to help make it happen.

So that was a very interesting dilemma. I had seen it a little bit with business owners before but now I see it over and over and over again, especially if you’re a solopreneur.

It’s your baby and you’re the main one in charge, it’s really easy to smudge numbers here and there when you’ve got access to the till when you’re doing any form of cash business whatsoever. You can just take that money and go home without much of a trail that temptations too high for most people, most people are going to do it, they’re going to not be all that clear cut on their taxes.

You know, they’ll make up the numbers that look reasonable. They’re able to skate by on that.

Over time, though, here’s the real problem, is when you’re ever looking to sell your business, it’s really tough, you really should know those numbers while you’re running your business. But if you’re making enough money, and you don’t feel like you’re spending too much money, then you’re going to keep going.

Even though a little adjustment here and there can make a big difference. I mean, you could be making twice as much money just by cutting an expense here, making sure this money goes here instead of here, making sure your money is coming back in the right way that can make all the difference in the world to you initially.

But then when you’re looking to sell it, you’re not going to be able to sell it without those numbers, not to anyone that would be able to keep it running. If you’re selling with someone that hasn’t ever done business or anything else, and they are looking at those numbers.

That’s not the type of person you want running your business to begin with. Unless you’re just looking to make the money and run and not worry about what happens to your business. If it fails tomorrow. You don’t care. That’s a different story.

If you do care about your business, if you do care about what happens to it and what happens to your customer base and everything else for your sake, and the sake of your customers and the sake of your business running beyond you.

You got to watch the numbers. And if you need help not all of us are numbers people. And some of us kind of have an interest in numbers but aren’t very good at them. Like I’m that way.

I really liked numbers, but I’m not very good at them. I’m not very good at keeping them and tracking them and doing all that stuff. I automate as much of that stuff as possible. I outsource as much of that stuff as possible wherever I can.

It’s just something to keep in mind as you’re going through with the life of your business, or if you’re looking to sell, you’ll want to bring someone in who understands the numbers and can help you fix the numbers figure out exactly how much it took.

For this particular business I’m thinking of that I’m working on right now with helping sell, we’re having to kind of back things up and say, okay, with today’s prices, everything else, how much does everything cost?

How much can we expect to get back in, and you have to base the numbers off that that you can’t go on past performance because there’s very little record of past performance. So that’s just a quick tip for me to you.

Hopefully, that’s helpful. If you want some more ideas, I have a book, 9 Ways to Amazon-Proof Your Business I wrote this book. It’s all about how to make your business competition-proof. So this will make your business fun and exciting to run. While at the same time, if you’re ever looking to sell it, you’re gonna make a pretty penny off of it. If you could make a competition proof.

You can go pick up a copy wherever books are sold, or you can buy a copy or you can download a free copy of the digital copy at AmazonProofBook.com. It’s all I have for today. You have a good one, we’ll be back tomorrow.

In the meantime, get out there and let the magic happen.

Business Is All About Math 🧮

Posted on by brianjpombo

Podcast: Play in new window | Download

Thoughts on Math and Business success.

Transcription

Business is all about math.

Hi I’m Brian Pombo, welcome back to Brian J. Pombo Live.

There was a story I’m reminded of, there was a supervisor that needed to hire someone real quick. And so he had a whole bunch of resumes, he had like 300 resumes. And he, he went to his assistant and said, here’s what we’re going to do, I need you to take the top 50 out of this pile, just the top ones sitting on the top of the pile, just count out the top 50 take the rest, throw them away, we’re just gonna call these people and go off that.

And the assistant said, Well, what do you mean, we’re not throwing away 250 resumes, I mean, what if the best candidates are in there, you haven’t even looked at him yet?

He said, Well, you got a good point. But I don’t need a buddy with bad luck.

That idea brings out well, we go a whole lot of directions. But the thing that spoke to me about that is math.

Whether you’re talking about hiring somebody, whether you’re talking about bringing on new clients, or customers, whether you’re talking about vendors or partners, or anything having to do business is all about people.

And to find the best people for the best spots in your business, regardless of what that is, whether it’s someone you’re working with directly, or whether it’s somebody that you’re hiring as a customer.

No matter what, there’s going to be better and worse and everybody in between in terms of quality in terms of what you’re looking for, from that person. And you know, a high-quality customer is going to be less of a headache, they’re going to be willing to spend more they’re going to behave more interest in whatever the product or services that you provide.

They’re going to be happier, they’re going to be less likely to complain, you know, they are going to be a good fit for what you’ve got.

Okay, that’s just an example.

And there’s a spectrum, no matter what, no matter what you’re talking about, any human being that you want to work with there’s going to be a spectrum in terms of being really high end in terms of how you, you were considered these are relative terms, right?

There are no high-end people, there are people that there are certain qualities you’re looking for, and there are certain qualities you’re not looking for. And there’s going to be a spectrum of everybody in between, from one extreme to the next.

How do you get to your best-case scenario, when you’re dealing with people?

Whether you’re looking to hire somebody or what have you?

How do you do that?

Simple, it’s math, it’s pure math, pure statistics, you need to go through more people. And there’s a whole lot of math to business a whole lot.

I mean, you go on and on about the types of situations you get into where you have to know at least some real basic math, you got to know how to multiply, divide, add, subtract, I mean if you’ve got those down, you’re, you’re well on your way.

And this is a simple concept is if you’re looking for the best-case scenario, you have to test a whole lot of people.

Now sometimes that test is nothing more than an app going through applications. Sometimes that test is taking your customer through an application process to sometimes that test is doing interviews it depending on which point the more people you can have to go through.

The more funnels you can have, especially if they’re automated, any type of funneling mechanism that can allow you to decide as quickly as possible.

Is this a good fit or not a good fit, it’s in the best interest of everybody involved, it’s not going to be in anyone’s interest to do any work with you whatsoever. Whether buying your product or working with you. It’s not in their best interest to be there if they’re not a good fit.

So we’re not hurting anybody by doing this. All we’re doing is we’re finding people who are the right fit for all the spots that you have in your ideal business. And that comes down to numbers, it comes down to more and more and more.

When we talk about sales and the thought pattern of a salesperson or a person involved in marketing, there’s always this argument back and forth of whether, you know, going through a bunch of numbers, whether you should do that or not.

I don’t see any way around it. You’ve got to go through numbers.

We had a little bit of this discussion with Ari Galper when he was on this show, when I interviewed him, you can go back in the archives and take a look at that. Ari Galper as a person that teaches sales mindset for salespeople, and for people building sales organizations, and I agree with a whole lot of what he says one of the things he spends a lot of time doing is he says that if you’re focused too much on numbers, you’re not focused enough on the quality of technique. And the quality of what you’re actually trying to do and I completely agree with that.

On the same end, you still need numbers, you still need to squeeze as many numbers as possible. It’s time-consuming, yes. And that’s where the quality of technique comes in the quality of process matters.

Because that makes the time window shorter, you don’t have to spend as much money, man-hours and so forth, trying to get the same end. But no matter what, if you want quality, on the other end of things, if you want the best customers, if you want the best staff, you got to go through a lot of numbers, you got to squeeze through, you got to test people, even to the very end to where you’re ready to hire.

You’ve got to be willing to test people for a period of time have a probationary period, where we’re going to see if we’re going to be a good fit or not. And you do that with enough people so that you know you’re getting the best-case scenario, your money’s going to a person that’s got great fit, and they’re gonna stick with you long term, or as long as you’re wanting them to stick. Right?

So these are this is a concept that is extremely simple. But most business owners get caught up in all the detail. Don’t get caught up in the detail. It’s numbered, it’s math, math, if you want the best-case scenario, you’re going to have to go through a lot of numbers to reach those people to reach the ideal. It’s statistics.

And that’s just one example of how math fits into business.

I talked about this a lot, we hit on a lot of different angles in our other discussions. So watch some of the other discussions regarding this.

Tomorrow, I am going to hit on the other major element that you have to have when it comes to having business it doesn’t matter what type of business it is.

Same with the math situation.

It doesn’t matter what type of business you have. If you need more of anything, you are going to need numbers, lots of numbers and that’s a mathematical issue.

Tomorrow I’m going to talk about the other major issue that you got to pay attention to so tune back in for that.

If you haven’t caught my book yet either. Get 9 Ways to Amazon-Proof Your Business. It’s all about how to overcome competition, go grab a copy at Amazon.com or get your own free digital copy at AmazonProofBook.com.

We’ll be back tomorrow night. As I said, we got a whole nother issue to talk about. In the meantime, get out there and let the magic happen.