Want Effortless Growth? Master This One Aspect
Can anybody master a game without learning the rules of the game?
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Introduction
If I were to give you a challenge to discover if a business is profitable or not, and you get a chance to ask just one question to the business owner, would you take that challenge?
This is not a trick question.
It is possible to ask just one question to know what’s the overall financial health of any business.
Just to make this a little interesting, I’ve hidden the answer (and the perspective) of this thought somewhere in the post, so make sure you read today’s post with that intent and seriousness.
The Numbers of Business
Business (read: life) is all about numbers/ data.
Knowing what aspects to track, measure, fine tune (and how) is the prowess and difference between an average business owner and a maverick.
Trouble is that most businesses today are struggling because the business owners are clueless about what metrics/ numbers they should track.
What’s even worse is when you hand over this information to someone and they give you a blank look because, now they know what to track/ look out for, but they don’t know how to measure progress, if any.
This is precisely the reason why you find so many people who were ideally supposed to be working professionals but have ended up as business owners and are now struggling to make ends meet.
The Business of Coaches
What makes the coaching business a little more typical is that the metrics of the coaching business have been established only in the last few years.
The coaching industry has seen so many iterations/ changes that only now can we create some sort of an understanding to compare a coaching business worth their salt from the rest.
If you’re intrigued to know about the metrics that you must measure thoroughly to run and grow a coaching business, I suggest you watch the latest episode of my podcast, “The Business of Coaches”
Although the name of the podcast refers to the coaching business, I'm sure every person who’s interested in the world of digital businesses will find a lot of value in this episode.
The title of this episode is, “5 Factors of Success in The Competitive Coaching Industry Revealed”
To watch this episode on YouTube, click here
To listen to this episode on the podcast application of your choice click here
The common metric for all businesses
To answer the question posed earlier, the question that you must ask any business owner to understand the profitability of their business is, “What’s been the annual cash flow in your business in the last 3 years?”
If you’re not sure what the word cash flow means, it’s basically the excess cash that the business is left with, after paying out all the expenses and liabilities for the particular time period.
If the cash flow generated in any business in the last 3 years has been on a growth trajectory, that’s a good measure.
Closing Thoughts
Sometimes, the answers to some of the situations that seem extremely complex on paper are in the fundamentals.
If you ever find yourself questioning a particular situation over and over, just remind yourself, “Am I doing justice to the basics? What are the first principles associated with this situation?” and I can promise you, your solution won’t be very far from the answer.
Your Thoughts!
If you feel you’re absolutely lost or if you feel you need more clarity with your niche/ positioning/ your personal brand/ your content strategy and would like to consult with me for the same, feel free to reach out to me and let’s connect.If you’ve reached till this point of the post, I’m sure you must have some thoughts/ feelings/ opinions about what you’ve just read.
I’m done sharing what’s on my mind, and now is your turn to share your POV.
Tell me how you are processing the information that you’ve just read?
Do you agree with my thoughts?
Do you think I missed something important?
Do you disagree with something in particular?
Let’s continue this conversation (or ask your questions about the post) in the comments below.
Keep Going Keep Growing 🚀
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Prompt used to create the image for the note
P.S.: Image made on Meta AI using the prompt, “Imagine a business owner who's tensed looking at the bank statement/ balance sheet of their business at the end of the financial year”