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Episode 39: Your Numbers Story™
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In this episode of The 7% Club, I introduce Your Numbers Story™, a powerful insight for scaling your business by asking 'What Are Your Business Numbers Really Telling You?'
Why Understanding Your Numbers Matters
I highlight alarming statistics: over 80% of businesses fail due to cash flow issues, and only 1 in 10 small business owners truly understand their financials.
The Fundamentals: Key P&L Numbers
Breakdown of sales, direct expenses, margin, overheads, and profit. I explain why margin is crucial and how it funds your overheads.
Margins vs Overheads: A Real Example
I walk through an example where overheads exceed margin, leading to a loss. I show how percentages tell the true story and are more useful than raw numbers.
When Sales Growth Can Be Misleading
Case study: a consulting firm grows from $750K to $1.5M in sales, but profit and team burnout tell a different story. I emphasise manageable and profitable growth over volume.
Client Value vs. Client Volume
A business with 1,000+ customers had only 164, generating most of the revenue. I show how refocusing on high-value clients can dramatically improve performance.
Product Profitability Breakdown
Example from a $13.5M product business: Product 4 contributes just 8% of sales but takes up 50% of warehouse space. I explore margin, contribution, and hidden costs of holding stock.
Final Thoughts
Understanding your numbers beyond top and bottom lines is key. I urge founders to dig into trends, percentages, and strategic insights—not just revenue growth.
💡 Key Takeaways:
- Profitability isn’t just about growing sales—it’s about managing margins and overheads.
- Percentages tell the real story. Always look beyond the surface numbers.
- Don’t overextend your team chasing unrealistic growth targets.
- Focus on your most valuable clients and products, not just the volume.
- Strategic insights come from understanding the story behind the numbers.
Connect
💡 Need help scaling your business from 7 to 8 figures? Get in touch [email protected]
Remember: Better strategy, better business, better life! See you next time!
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