Discover the numbers that matter in your B&B
If you’re really serious about the success of your business then you have to keep up to date with the numbers that matter so you understand exactly what’s going on in your business.
Most accommodation providers don’t measure the right things!
From experience, however, I know that too many people don’t focus on the numbers that are really going to help them drive their business forward.
They tend to focus on numbers like bookings and turnover. And often, to make matters worse, many rely on their accountant to produce these figures and they only get them once a year in their annual accounts, usually several months after their year-end by which point it’s just too late to react.
It’s not that you don’t need to know any of those traditional measures, but on their own they aren’t the best numbers to help you grow or run a better business – you have to know what is driving them.
You need to know the numbers that help you look ahead and get you where you want to be. You need to know what is causing bookings or profits to go up or down, which bits of your marketing are working and which aren’t, where you’re strong or weak.
You need to focus on the numbers that run your business!
The only way to understand what is happening in your business is to know these numbers inside out!
When you really understand your numbers then you’ll always be equipped to make the best decision for you and your business.
But what are the numbers that matter in your business?
The most important number to know is your CASHFLOW. Cashflow is what keeps your business afloat – it basically runs your business.
As long as you have enough cash you will always be ok in business. Cash is actually more important than profit!
The second number that you need to know is PROFIT. But I don’t mean what last year’s accounts said! I mean how much money you made last month or, even better, last week.
If you don’t know what this is then you really do not have a good grasp of the numbers in your business. If you cannot tell me how much you made last month, then you are in a seriously dangerous position. Think about it.
The third number that you need to focus on is the RETURN ON INVESTMENT (ROI) on each particular piece of marketing that you do.
I know exactly what return I get from my marketing spend but I know that this is not something that most accommodation providers can say. You need to know this if you want to be successful.
The final number that you need to focus on is your OVERHEADS. These are fixed costs: the costs that you incur whatever the level of business.
Too many focus on the bookings and revenue generation and fail to take care of the costs.
In many businesses there are serious savings to be made but they do not happen because, once again, the owner does not know his or her numbers.
Until next time, remember…
If you want a successful accommodation business then you REALLY need to know your numbers. So if, hand on heart, you can’t say that you know every figure you should know then you need to start number crunching straight away!