KNOW YOUR NUMBERS - August '09

HOW OFTEN DO YOU SEE THE LIFE DRAIN OUT OF A BUDDING ENTREPRENEUR ON DRAGON’S DEN WHEN QUESTIONS ABOUT THE “NUMBERS” ARE BEING ASKED?

Well unfortunately, it’s quite frequent. And as soon as would-be investors see that, the alarm bells start ringing and the pitch is usually over and out. So, why is financial awareness so important?

In the first place, if you “know the numbers” it shows the depth of understanding about your business that must exist to have a chance of success. And it suggests to a prospective investor or lender that you are in control. As a result, they can be more confident about investing. Now this has always mattered of course, but it’s really vital with the tightened investment and lending criteria of the post-crunch era.

Then you have to use the numbers - because they are a dynamic model of your world. They describe how things work and the impact of events – good and bad. Without them, you can be fumbling in the dark when it comes to the impact of what just happened and what to do next. But use this knowledge to support your decisions, guide your activity and manage your people and you should stay ahead of the curve – which is where your investors want you to be.

Staying on top of the numbers is about being informed and making finance management a key part of your business. Get to know them and it can only help to impress a dragon, an angel or any other species of investor...!

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