My favorite thing about numbers, they don’t lie. I’ve always been a fan of the saying, “Stats don’t lie, statisticians do.”
Almost any number can be grouped into one of two categories: Hard numbers and soft numbers.
A hard number would be something that doesn’t have a lot of flexibility. An example of a hard number would be your W2. A W2 reports your wages, pretty straightforward, right?
So what would be considered a soft number? It’s a little trickier because it’s subjective.
Let’s say Bollitproof organizes a large dinner at a restaurant with a bunch of potential vendors and customers. There’s a huge banner outside with the “BollitProof” logo and some signs in the front. The restaurant charges BollitProof $10,000 to rent it out for the evening.
So, what would this be considered?
Is it advertising? Marketing? A gift? Entertainment?
Depending on which category this event falls into, BollitProof will either get a 0%, 50%, 80% or 100% deduction.
This would be considered a soft number due to the fact the deduction percentage is subjective.
The purpose of understanding your numbers isn’t just for financials, but for gaining knowledge about your business.
If you don’t understand the numbers in your business, how can you make good decisions?
Say you’re in a network marketing business and want to build out your website, your coaching practice and add an incentive trip for your team. This can run you thousands of dollars.
But what if your coaching practice isn’t making an income? Or what if those incentive trips don’t elicit any change in your employees? It’d be a waste of money.
Take a minute and read your financial statement, take another minute to really understand what it says. If you don’t understand it, you’re simply guessing and probably losing money while you’re at it.
You want to figure out what works and keep doing it. It’s also just as important to understand what doesn’t work so you can stop. I know that sounds simple, but this is a BollitProof philosophy necessary to implement in your business if you want positive growth.
If you don’t understand financials and someone sends you a proforma on an investment, but you don’t even know how to read an income statement, how can you make an educated decision on whether or not to invest?
Understanding how numbers work is incredibly important. And don’t be scared of them!
Many people shy away from numbers because they hated math as a kid or they’ve simply convinced themselves they aren’t good at math. Our role here at BollitProof is to help you stand up to your fear of numbers. Because numbers are so much more than just numbers – they’re make or break for your business.