Business math
How do you think about the math of your business?
Do you think in terms of:
Revenues vs. Expenses? Every month, you watch your billables and ensure they exceed your average burn.
Unit Economics? For every product you sell, you know how many dollars go to paying rent, to paying your staff, and how many you get to keep in your pocket.
Billable Hours? You know that every person in your practice needs to hit a specific utilization for you to turn a profit, and you're constantly watching those timecards.
Conversion on Marketing Spend? Every dollar you make is the result of marketing and advertising, so you're honed in on getting the best conversion for your investment.
Return on Investment? You spend a certain amount with the expectation you'll reap the reward, so you're tuned into dollars down, the time elapsed, and how returns compare with your expectations.
Here's the thing:
There is no limit to the variety of ways you can think about the math of your business.
But to run the business well,
2 things need to be true:
Your math needs to make sense for the type of business you're running
Your reports, models, and financial tools need to match your math
Get either of those 2 wrong,
And you're just running your business blind.
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