Avi explains why most business owners fail with their finances: they treat bookkeeping as a once-a-year chore instead of using real-time data to make decisions. Relying on hunches instead of numbers leads to worse outcomes.
So Avi, you've seen hundreds of businesses from the inside. What do you think is the number one mistake owners and managers are making when it comes to understanding their numbers?
The biggest mistake I would say is that they're not understanding them. Kind of like you said, they take it as a once-a-year thing that they transfer their books from their bookkeeper to their tax accountant. Their tax accountant fills out their tax return, they sign off on it, and they're done. That's about all they're using their numbers for when really, as you said, there's a wealth of data there. The wealth of information that they can use to make better decisions based on data instead of going on a hunch, on a whim, by the seat of their pants. There's ways to make decisions that are smarter, that are actually based on realistic information and data and insights that you should be able to have in your business if you could only understand it. There's so much more that goes into a business than just the gross profit. And as the business owner, you have to understand it. You have to understand what are those numbers telling you.
