Know your Numbers
We recently talked about knowing your numbers in business on our social media, but what does that even mean?
We firmly believe that knowing your numbers is the number one way to grow a business and keep your dream alive, it is one thing to have a dream, it is another to have a plan that supports that dream and allows it to flourish. This is why it is crucial to MEASURE EVERYTHING.
But what to measure? Below I have outlined several essential ways you need to be measuring to keep your numbers in order so they work in your favor while helping your business thrive:
Working capital: Working capital is the capital you have available to work with today. This is determined by subtracting current liabilities from current assets. A rule of thumb says you should have $1.50 to $2 of current assets for very $1 of current liabilities.
Revenue: By getting clear on how much money you are generating vs. how much you are spending, you will get a clear picture of your operating costs. These numbers will help you tighten up expenses and maybe get more creative with bringing more clients in.
Expenses: How much are you spending? A simple review of your bank and credit card statement will give you the numbers you need.
CAC: One very important number is the CAC. How much does it cost for you to get one customer/client? CAC = All sales, marketing expenses, / # of new customers, may include paid advertisement, events, sponsorships, collaborations, gifts to customers, content production, social media, web design, photography and more.
Net Income: The amount of revenue left after subtracting all expenses, taxes and costs.
Profit and loss: Also known as P&L statement, which is a snapshot of your company’s income (sales and revenue) minus expenses during a specific period of time, which is generally quarterly, every six months or yearly. Knowing your company’s profit and loss over time allows you to protect earnings and make realistic plans for the future, both short term and long term.
There is so much that goes into running a business. If you are new to lashing or planning on growing your already established business, know that it’s okay to ask for help! Business advisors, coaching strategists, accountants, financial advisors…there are so many professionals ready and willing to help you!
Remember do what you do best and hire the rest!
We really hope this was helpful for all lash artists running your own business. Stay tuned as will be sharing more business tips soon!