May 16, 2013 – ISSN# 1545-2646
It is about the real Numbers
One of the interesting shows on TV is called – Dragon’s Den in Canada or in the US it is called Shark’s Tank. The concept of the show is entrepreneurs come in front of a panel of very successful business people who are potentially willing to invest their money and some of their time into a start up business for a return of a portion of the business.
The entrepreneurs show their stuff and then ask for a dollar amount for a defined share of the business. I.e. $75,000 investment for 25% of the company. The shark’s or dragon’s then proceed to ask questions of the business person about their business; amount of sales, both past and present, trends and then about expenses.
It is always interesting to hear not only the questions but then the responses or lack of responses of the individuals who are there trying to get the investment capital and business acumen from these successful people. Many times the answers don’t support the investment or portion of the company they are offering up as part of the deal. It is about the real numbers not the numbers you hope to get to in the future if everything goes just right.
Many business owners leave their employers and go into business not because they want to run a business but because they have certain technical skills they want to be paid for and believe they can garner more value for their skills out on their own. They start out with a narrow focus leveraging their own skills and grow an organization which now runs them. The daily operations take them away from not only their technical capabilities but throws them into the sea of financial turbulence.
Fortunately, there are some software tools which can help capture and organize their income, expense and other various aspects of the books. The reality is – do all the numbers add up to the right things.
This week, have a conversation with your accountant, CPA, financial team about your “Real Numbers.” Are they where they should be? With the first quarter of the calendar year well completed, did the numbers meet or exceed projections? If there is a variance – what caused it and what is going to be done to either change it if negative or leverage it further if a positive.
Questions or comments – email us at partners@jklassociates.com or call our Office at (313) 527-7945
Copyright – JKL Associates 2013
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