Overcoming Number Phobia: A Guide for Business Owners

It’s crucial to have a clear understanding of the financial numbers and other data for your business and what they mean, and you don’t need an accounting degree to do so

Overcoming Number Phobia: A Guide for Business Owners

Carter Harkins and Taylor Hill

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Does the thought of return on investment, cost per acquisition, conversion rates, and budgeting make you break a sweat?

Rest assured, you're not alone. Many business owners share this common fear of numbers. We've heard numerous business owners express unease when it comes to diving into the numbers in the marketing of their companies. But there's no reason for concern. Most business-related calculations require only simple arithmetic — addition, subtraction, multiplication and division. And with a calculator readily available on your smartphone, it's not as daunting as it may seem.  

Sure, it might feel comfortable to steer clear of anything that triggers fear and anxiety, but here's the truth: Without a clear understanding of your business numbers and what they mean, you're navigating a minefield.  

Regardless of how number-phobic you are, it's crucial to familiarize yourself with your business's figures and you don't need an accounting degree or to surrender your valuable weekend hours in a secluded room with your laptop, a mound of charts, and a calculator. If that was necessary, very few of us would bother to understand our numbers.

Here are five steps to overcome your anxiety and form a close connection with your business numbers.

#1 Accept your feelings toward numbers.  

Many of us feel uncomfortable diving into the numerical aspects of business for various reasons. Perhaps you didn't excel at math in school, or a teacher discouraged you. Maybe past struggles with money incite anxiety, reminding you of times when you felt insufficient.  

Whatever the root cause, it's time to face and accept these feelings. Only through acknowledgment can we transition from feeling powerless to becoming empowered. And remember, you can and will conquer basic arithmetic with a calculator.  

#2 Prioritize cash flow management.  

Cash flow must be a key focus in your business. Like blood in your veins, without cash flow, your business can't survive. During slow business periods, sufficient cash reserves are necessary. If you fail to plan for these downturns and monitor your cash flow, you may have to let go of employees or even shut down.  

Don't underestimate the importance of cash flow management. Companies like Amazon have grown significantly by mastering their cash flow, despite their small profit margins. So, focus on critical key performance indicators (KPIs), such as cash flow, rather than trying to comprehend every single number in your business.  

#3 Enlist an accountant and seek assistance with daily numerical tasks.  

At some point, every business needs an accountant. If you haven't gotten one yet, consider hiring one. Ensure that you can trust them, vetting them as thoroughly as your customers vet you. Not all accountants are equal or ethical. Hence, seek someone with integrity, capable of not only looking after you and your business but one who can also help you learn what the numbers mean. This will help you be more comfortable with interrupting the numbers on your own.

However, traditional accounting often looks backward, asking, "How did we perform?" But since you need to manage the current cash flow, it's essential to have someone overseeing the daily operations.  

Thankfully, some people thrive on dealing with numbers. This person could be your spouse, a mentor, your office admin, or even your lead tech. Having someone to help make sense of everything will ease the burden, making it less daunting to face the numbers. Keep an eye out for individuals who can help you comprehend what’s going on with your money on a daily basis.  

#4 Change your perception.  

Understanding your business numbers is crucial. To do this without the accompanying dread, try changing your approach. Make it enjoyable. Anticipate something rewarding. 

Turn it into a game. Consider your numbers as a treasure to discover or a mystery to solve. It might sound silly, but if you add a fun element to the process, it can reduce the resistance you usually feel, and you might even start enjoying it. It's similar to listening to your favorite album while working out. These small additions can make difficult tasks more bearable.  

A valuable change in perspective is understanding your numbers as a source of empowerment rather than a daunting chore. Every time you review the numbers, even if they are not encouraging, you are granting yourself the opportunity to make informed decisions, to be proactive rather than reactive.  

The truth is, experiencing a bit of discomfort when dealing with numbers is far better than the recurring anxiety and stress from avoiding them. There is nothing more frustrating than turning around one day and realizing you are broke without even seeing it coming. Changing your perspective is key if this is something you’d like to avoid.

#5 Set a schedule to review your financial statements.  

Having an accountant doesn’t exempt you from being involved in your finances. You still need to be familiar with and regularly review your financial data. Only by doing this will you be able to identify anomalies and know when to adjust or how to plan for the future.  

It's essential, regardless of your business size, to be aware of your financials. That means either you or a trusted individual should be keeping an eye on your cash inflows and outflows. This is how you determine cash flow.  

If your cash inflows exceed your cash outflows, you have a positive cash flow. If the situation is reversed, you need to make up the shortfall to stay afloat. As you can see, basic addition and subtraction are all you need to understand this crucial business metric.  

Even with an accountant, you should also set time aside each month to review your fundamental financial statements (Profit & Loss and Balance Sheet) from a broader perspective. This way, when your accountant provides a quarterly update, there won't be any major shocks or surprises. You'll be an empowered leader, and an empowered leader is always more effective.  

A Quick Note

If your accountant doesn't take the time to explain these critical metrics, ensuring you understand them, then it might be time to switch accountants. Delivering the documents is only part of their job; the other is to ensure you understand them.  

Knowledge is Power  

Ignorance in business can be harmful. What's preventing you from understanding your numbers? Is it the anxiety that comes with seemingly complicated concepts? Here's something crucial to remember: You are capable of understanding. Knowledge is indeed power. The sooner you understand these critical numbers, the sooner your anxiety will fade, replaced by empowerment. Being empowered to make better decisions will result in a healthier business.

The Marketing Metrics Important to Know

Up top, we talked about ROI, CPA, and conversion rates, which are all related to marketing your business. However, without a proper marketing budget to work with, you don’t have a starting place.

If you do your marketing by asking, “How much do I have to spare this month?”, then your marketing is more like a shotgun approach than a rifle one. That doesn’t mean it won’t be somewhat effective, but when you have a standard budget to work with you will be able to create standards around your overall marketing. 

A good example is ValPacks. Knowing how much you spend each year on this one thing gives you metrics to compare with every season you advertise here. A budget would allocate a certain amount to spend each year. If that spend doesn’t get the same or better results than the previous year, you may think it’s no longer working.

While that is a logical leap, you may want to look deeper into why that is. Did the cost of the ads go up thus causing you to reach fewer people? Did you give a deeper discount the previous year? Did you target a different region? All things to note when figuring out the real ROI of a marketing campaign.

In marketing, it’s never only one thing that needs to be evaluated. However, it all starts with a consistent marketing budget that can only be calculated once you know your overall numbers. 

About the Authors

Carter Harkins and Taylor Hill are the authors of Blue Collar Proud: 10 Principles for Building a Kickass Business You Love and the owners of Spark Marketer, a "no bull" digital marketing company that’s been getting sh*t done for home service businesses across the nation for a decade. They’re trusted thought leaders in the industries they serve, which is why you’ll find them regularly speaking at service industry trade shows and conferences and writing for trade magazines. Tired of empty promises and ready for focused digital marketing and balls-to-the-wall dedication that gets your business seen? Visit www.sparkmarketer.com.


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