Business Success is Neither Accidental nor Promised

KNOWING THE NUMBERS may seem to be the easiest secret to success, but the truth is that it is not easy for everyone to know the numbers that matter. Successful entrepreneurs are aware of the need to analyze the performance of their businesses not only when things are going wrong, but mostly when it seems all is well.

Remember when everything is seemingly lost, it might be too late to gather the spilt milk.

A good business will always set aside a budget for professional services which can be used to get assistance from a business analyst or strategist who is knowledgeable enough to use the entrepreneur’s frustrations, stories, financial data and market analysis to provide solutions and insights that can turnaround the business’s fortunes.

Recently, whilst talking to a successful business person, they lamented on the need of having a third voice or counsel (advisory services) because they were fatigued and needed fresh perspectives for the business. He went on to admit that, only those who can stop, pause and ask for the third voice, especially when business is doing well, can ride the growth curve.

Given different backgrounds, an entrepreneur can be talented in their craft or exceptional in terms of their product or service offering, yet stumble in KNOWING THE NUMBERS for their business.?Most people and entrepreneurs in general are not able to read the numbers that matter. Many can calculate profit or loss, operational costs and be happy, but is it enough for the business to survive or its just satisficing?

What is needed is at least, a systematic analysis of the margins, month on month changes, seasonal variation analysis, working capital dynamics, scenario analysis, e.g. pre-Covid, post-Covid, product line sensitivity analysis, inflationary impact adjustments to analyses or pricing, elasticities, current year to prior year adjustments, value addition, flagship products, stars and dogs, cross selling per site, and concomitant recommended actions, etc. Those that see value in the act of KNOWING THE NUMBERS, religiously invest in it. This can be done by either hiring a full-time professional or outsource a high quality business analyst-advisor. Ultimately, such intentional businesses can have a foot in the door towards achieving a sustainable competitive advantage, which is neither accidental nor promised.

Finally, KNOWING THE NUMBERS cannot be achieved if small to medium enterprises [some of which have annual revenues more than BWP13million (the limit, at today’s exchange rate, of reporting using the IFRS for SMEs Standard)] do not keep proper records. Data and business records should be kept up to date, whether or not the reporting standard uses the it data or not. An overkill in keeping financial records and data will always lead to better insights for the benefit of the entrepreneur. Simple stated, it is easy to analyze the financial, and other related data with positive outcomes if the data is good quality data. The five Vs of data can be applied in defining “good quality” data; these are velocity, volume, value, variety and veracity. ?

Over the years, as a business analyst I have learnt that good quality financial data can be a great soothsayer!??