What Impact Does Not Knowing Your Numbers Have on Your Business?
About this episode
Robert’s plumbing business is growing and his bank balance looks healthy. But without a monthly P&L, he’s been making decisions on gut feel and last week’s results, and missing the costs quietly creeping up in his business.
In part two of the Robert series, Kerry looks at what not knowing your numbers really costs a home service business: guesswork decisions, hidden overspending on fuel, maintenance and utilities, and missed chances to grow. She explains how comparing your P&L month to month helps you spot problems fast.
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Key takeaways from this episode
- Without a P&L, decisions are based on gut feel or your bank balance, and that’s risky.
- Money in the bank doesn’t mean you’re doing as well as you could be.
- Small amounts on your bank statement can add up to big monthly totals.
- Compare your P&L over three and six months to spot unusual spikes.
- Check fuel card, maintenance and utility bills before you pay them.
Show notes
Running the business blind
Kerry continues the Robert series. Five years in, his plumbing business is growing with good cash flow, but until recently he didn’t know the details of his numbers. This episode looks at what that cost him.
Gut-feel decisions
Without a P&L, Robert made decisions based on how he felt, his bank balance or how last week went. If last week was unusually good, that can lead you badly astray.
Hidden costs you can’t see
Individual payments of a few hundred dollars don’t look like much on a bank statement. On a P&L, you see the totals: materials, subscriptions, meals, fuel, auto maintenance and utilities. A truck that keeps breaking down or crews overbuying materials becomes obvious.
Spotting spikes with comparisons
Kerry shares examples of how month-to-month comparisons reveal problems, like fuel jumping from around $3,000 to $4,000 or a warehouse AC running all day and sending the electric bill through the roof.
Know your numbers inside out
Understanding your P&L helps you plan, scale, add crews and increase profitability, and Abacus helps owners who get a P&L but aren’t sure what it’s telling them.