Numbers…Numbers, Numbers, Numbers..

They tell a very important story.

The TRUTH!

I get pitched with “new business ideas” all the time.

Infact, these last couple weeks, I’ve had in influx of ideas — with very little rigour or understanding around the numbers that underpin the business being pitched.

ATT: Entrepreneurs & Startup Founders!!!

If you don’t build a model for your business & show how the math actually stacks up in your favor, you’re putting your entire dream & vision into the hands of “hope” — and that’s a recipe for a disaster..

I speak from experience.

When I was younger, I would continually fly by the seat of my pants. I would have money coming in left, right & centre, but no idea on where it was all going, & no real handle on what was actually occurring from an accounting / financial management standpoint.

Now..alot of entrepreneurs have the ability to “sense” what’s working, and what’s not — and granted — too much analysis too early on can just stifle you, BUT, if you don’t create some basic financial modelling for your business — when things begin to roll either in a good or bad direction, you’re going to lose all control.

There is a startup I’m advising for right now which has a brilliant concept, which I am quite excited about — but the financial model that it was built upon showed it losing $1m over 12mths, all the while the founder was assuming raising $100k would be all he needs!

After doing the model, and actually seeing what ‘x’ margin & ‘y’ cost equates to over a period of time, adjusting for as many variables as possible — we actually realised that the initial strategy for the business needs to be completely different.

Get your models done!

Please note this:

Once you do your numbers, one of two things happen:

  1. You either see that your initial assumptions are fucked, and you find another way forward and thus dodge a major bullet.
  2. You realise that your initial assumptions are fucked, and there is no other way to make this work, so you drop it & again, dodge a major bullet.

There is no “loss” by running models. Either way you save yourself a shitload of headache.

And as basic as this may seem, you would not believe how many business owners, entrepreneurs & founders skip this step because they quote:

“don’t like numbers”, or “don’t have the time to run models”, or “are too busy making sales”, or “have this idea that will lose money initially but make it all back later”..

That’s insanity.

If you’re in business, or are planning to run your own business, or are joining a startup, get your numbers sorted out!

If you can’t do it, find someone who can. Or actually better yet — Learn how to do it yourself! Understanding your numbers is an absolutely 100% necessary skill if you’re going to be in business. There is NO excuse.

Your new mantra..

Even if it’s basic, do it — and then you can find someone to turn it into more of a model & forecast (which as long as you understanding your assumptions & variables) will help you shed more light on where the weaknesses / strength / limitations and opportunities are in your business.

So there you have it.

Go do your numbers!

Thankyou

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Founder @ www.amber.app. Editor @ https://bitcointimes.news. Bitcoin, Money, Philosophy, Business, Startups & Entrepreneurship. Podcast: Anchor.fm/WakeUpPod