If You Don't Know Your Numbers, You Don't Know Your Business - Agree?

I was talking to a buddy of mine the other day about general business stuff. He founded and built a business telephone company from scratch so he's very focused on numbers, especially all the government required fees that affect the prices he charges his customers. There seems to be far too many hands constantly grabbing for "their share" through taxes, tariffs, fees, etc. It's a wonder how businesses make it considering all the obstacles put in their way. That's a topic for another day.

We also talked about the importance of paying close attention to revenues and costs. At one point during the conversation he made the statement, "If you don't know your numbers, you don't know your business."

I have no argument with that. It's ultimately important to know how much money is coming into a business and the costs of operating that business. It's absolutely necessary to know the sources of the money flowing into a business and what affects those income streams. For example, the quality of products and services, the competition, the market in general, the economy, the effectiveness of marketing and advertising, the skill of sales people and more.

It's equally important to control costs - cost of goods, rents, mortgages, insurance, licenses, tariffs, fees, risk management, salaries, wages, benefits, and on and on.

You do have to know your numbers so you can make good decisions relative to increasing revenues and controlling costs.

I prefer to look at this topic a bit differently. My perspective starts with this question, "Who's responsible for all the activities and decisions that determine whether or not revenues grow and costs remain low?"

The general answer is "People." People develop and maintain the quality and reliability of products and services. People pay attention to the competition, the market and the economy. People create and monitor marketing & advertising campaigns. People acquire new customers and work to retain existing customers.

It's the same on the cost side. People negotiate for the best deals on mortgages, rents, insurance rates, benefit packages, costs for materials and much more.

The quality of people in a business greatly influences the accuracy and reliability of the numbers, and the results that affect revenues and costs.

I'm sure you can see where I'm going here. From my perspective, "If you don't know your people, you don't know your business."

Hiring the right people who want to contribute to the success of your business, assimilating them correctly, training them thoroughly, managing them effectively, rewarding them appropriately, and ensuring they become enthusiastic members of your team by understanding and agreeing to expectations and standards of measurement affects the numbers on both sides of the ledger.

Knowing your numbers makes no sense without knowing your people.

If you're just watching the numbers in your business, it's in your best interest to evaluate the people responsible for achieving the numbers you want to see and doing everything you can to help them become successful as individuals so they contribute positively to the growth and success of your business.

Brian Silverthorn is president of Success Systems. He's been a business adviser and personal development coach for more than 30 years. In addition to working directly with a handful of clients he also focuses on helping professionals that offer products and services to small and mid-sized business spread the word about who they are, their expertise, their specialties, and what they have to offer.