Importance of Reporting for Decision Making

Treating your business like a "business" from the start is the difference between success and failure. Running weekly monthly and quarterly reports, keeps your eyes on the numbers and you abreast of changes as they happen. Using week over week, month over month and year over year report comparisons help you evaluate whether this just a one time occurrence or the beginning or end of a trend.

So many business owners, especially solo-preneurs misunderstand the value of reports. "If I'm the only person in the business, why do I need reports?", one client quipped. My response included the following 3 points: 1) reporting gets you in the habit of running your business like a business instead of an extension of your personal life and finances, 2) reports set a precedent of how operations, meetings and reviews will be conducted in the future as your business grows beyond just yourself, 3) reports give you a collection of data from a finite period in time that is sorted and analyzed based on specific criteria critical to your business.

So what reports are absolutely essential? In some ways, that question is unique to the type of business, the reporting of a retail business will differ from that of a service company. However, in my opinion, all businesses can benefit from the following 3 reports on a weekly basis: 1) A Balance Sheet, 2) A Profit & Loss, & 3) a custom report.

An example of data in a custom report would be the following: using an excel sheet you would zero in on specific numbers in your P & L to create a summary week over week, month over month or year over year report.

For example, the owner of a scuba store that also offers classes may want to view the following information for this week, this month, so far this year Vs 1 year ago for the week, month & year:
Sales
# of classes sold
# of dive trips sold
# of equipment sold(i.e- tanks, masks, suits, etc)
Expenses
Advertising
Labor
Utilities
Supplies & equipment

Seeing this data in a report makes it so much easier to make informed decisions based on actual events instead of gut feelings and I think so there for it is.

Feel free to contact me if you need one on one consulting on structuring reports and using them effectively for your business.

Have a great week!