Send us a textIn this conversation, Mike interviews Chris Wheldon, an investor and entrepreneur, about the importance of understanding and analyzing numbers in small and mid-sized businesses. Chris shares his experience in acquiring and investing in businesses and highlights the key metrics he looks at, including cash flow, profit, margin, cost structure, and return on capital. He emphasizes the need for business owners to have a strong grasp of their numbers to make informed decisions and ensure the sustainability of their businesses. The conversation also touches on the value of data transparency and the benefits it brings during the acquisition process. Understanding and analyzing financial metrics is crucial for business owners and managers. It is important to measure the inputs that contribute to revenue and profit on a weekly basis, such as sales, marketing, and customer retention metrics. Monthly measurements should focus on understanding sales trends, cost structures, and budgeting for future expenses. Quarterly analysis should provide a full picture of financial performance, including working capital changes and cash flow generation. Annual reviews allow for a deeper understanding of the balance sheet and the true financial profile of the business. The key takeaway is that while the numbers are important, they are a reflection of the decisions and actions taken by the business in serving its customers and stakeholders.Takeaways.Understanding and analyzing numbers is crucial for small and mid-sized business owners to make informed decisions and ensure the sustainability of their businesses.Key metrics to consider include cash flow, profit, margin, cost structure, and return on capital.Having a strong grasp of numbers allows business owners to negotiate better deals and demand higher prices when selling their businesses.Data transparency and access to high-quality information are indicators of a well-run business and can attract potential investors.Focusing on both input metrics (e.g., lead generation, customer activity) and output metrics (e.g., financial performance) is important for monitoring business performance.Regularly reviewing and analyzing numbers on a weekly, monthly, quarterly, and annual basis provides a comprehensive view of the business's health and progress. Measure the inputs that contribute to revenue and profit on a weekly basisMonthly measurements should focus on sales trends, cost structures, and budgetingQuarterly analysis provides a full picture of financial performanceAnnual reviews allow for a deeper understanding of the balance sheet and financial profileThe numbers are a reflection of the decisions and actions taken by the businessChapters00:00Introduction of Chris Weldon03:04Chris's Background and Current Venture07:37The Problem: Lack of Understanding of Numbers13:08The Importance of Knowing the Numbers15:56Key Metrics for Assessing a Business22:21The Owner's Understanding of Numbers24:58Metrics to Monitor Weekly27:10Metrics to Monitor Quarterly32:20Understanding Sales Trends and Cost Structures36:46Analyzing Financial Performance Quarterly44:04Deepening Understanding of the Balance Sheet Annually46:08The Numbers Reflect Business Decisions and ActionsFind out more about working with me or about applying to join the ILN. [email protected] https://www.linkedin.com/in/mikeadamscott/ https://theintentionalleaders.com/

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