I have never been much of an “attention to detail” kind of person when it comes to financial figures. In my early days as a business owner my record keeping would literally be taking a shoe box full of receipts and cheque stubbs to my poor accountant once every few years (hard to imagine that I had issues with the Taxation department isn’t it?).

I had no idea about cash flow, account reconciliation, profit and loss or balance sheets. I bumbled my way around these things for almost twenty years. I never had accurate figures, my accounting was simply adding up money in and money out in my bank account or seeing how much was in the till at the end of the day. Of course I couldn’t budget, I had no way to manage money and I never knew how much anything cost.

I didn’t realise how important this really was. My philosophy was always on the front end of the business. Focus on making money and as long as you make enough you wont have any problems. Unfortunately that is so wrong for so many reasons I don’t know where to start.

To be successful in business and to make your business as BULLETPROOF as possible you have to have access to accurate financial figures that are current as they can be. Ideally you need to know at the end of each day exactly what the financial position of your business is. You have to have complete faith in the figures being given to you either by an accountant or your bookkeeper. You have to know your debt position and all liabilities. Nothing is worse than getting a huge surprise bill that you didn’t know was coming.

Having accurate reports is great but they are of no value at all if you can’t read them or understand them. I make a point of getting my accountant to always explain financial reports. I read a lot of books and ask a lot of questions. I get copies of Public Company Annual Reports and read through page after page of figures to form my own opinion on the financial state of the business. I learnt how to make cash flow forecasts based on the payment history of my clients and so on.

My biggest realisation with all of this was that none of it is that complicated. All it takes is some effort and time to learn what the numbers mean. It won’t take long until you get to see mistakes on reports or pick up issues in your business that before you wouldn’t even have known about because your reports were not accurate enough to pick up this information.

Knowledge really is power, especially when it comes to figures and running a business. Numbers tell you so much about the state of your business. They tell you whether or not you are making money, something that is surprisingly hard to tell at times, how long any cash reserves will last, is your business growing, how quickly do you collect money and so on. A business with great records is always worth more than one with poor records, for obvious reasons.

I believe that it is impossible to BULLETPROOF any business if you don’t have accurate figures that you can understand, delivered to you as quickly as possible.

I used to have a small travel company that sold optional day tours to people who visited Cairns. I used to go to the hotels and meet the customers, most people on holidays from the UK. I would show them brochures filled with hundreds of things they could see and do whilst in Cairns. My sister used to help me with selling tours and over time, I noticed something interesting. 

My average sale was about $500 per person in tours. My sister’s was about $150. Why the difference? Was I that much better a sales person? Not really. Wendy was a very open and honest person, she was a great listener and she was very professional in every way. So what was the difference? I believe that it was because we had different beliefs about money, even though we grew up in the same environment.

At the time, Wendy was a mother of three kids and her husband was in the navy. Like all young families, money was tight. For her luxuries were thin on the ground and most of their money went into paying the mortgage and putting food on the table. She would never go out and spend $500 on herself.

I was the complete opposite. I was married but we had no kids. My wife and I loved to spend money on ourselves. We went on holidays, bought nice things, spoiled ourselves often, even if we couldn’t afford it. To us spending $500 on something we wanted was no big deal.

So when Wendy was selling tours, she was applying her values and beliefs around money to the sales process  - that is – “wow, these tours cost a lot of money, I will recommend the cheaper ones”. Whereas for me, the internal dialogue went along the lines of “these are the very best tours money can buy, I know the customer will have a great time and they are the ones I would be doing. Who cares how much they cost?”

We were selling to the same types of customers, but we sold completely differently based on our internal dialogue. I think this belief system about money has a very big influence on many people in business. I feel that it stops people charging what they are worth, it prevents some business owners from investing in their business because they think that what they want to invest in is too expensive and it stops people getting the best advice because once again, they feel it is too expensive. 

What are your beliefs about money? What are your staff’s beliefs? What do you think expensive means? What is a lot of money? Clearly the more we know about our own values around money the more able we are to change them if they are not appropriate or if they are holding the business back. 

The same applies with our staff. If you have someone working for you with different beliefs about money, you may see a big drop in sales. This can be overcome with training and with the staff member working with someone who has different beliefs. Instead though, many business owners just accept that the salesperson simply doesn’t have the same skills and they do nothing to change the situation. 

One of the biggest business issues that I see a lot of, is people not charging enough, particularly for service based businesses. Most of the time this is because of the owners beliefs about money. It is a sure way to go broke. Setting prices needs to be done analytically and according to costs, but a business needs to run at a profit to survive and the only way this will happen is by earning more than you spend. 

Sounds obvious doesn’t it - but I wonder how many businesses, out of the almost 2 million in Australia alone, don’t run at a profit because they don’t charge enough? I think it would be a surprisingly high number. 

People will pay for quality. If you charge more than you are worth you will soon find out because people will stop buying from you. Never ask your customers if your prices are too cheap because they don’t want you to put your prices up. But if you give them value, meet and where possible exceed their expectations and deliver on your promises, they will pay you a fair price. 

If you understand your own beliefs around money, the positive ones and the not so positive ones, you will be able to address many issues in your business and in your life.