Businesses in the trades have one of the most interesting business models out there. It’s rare that every dollar generated in a company is outside of the owner’s line of sight. You don’t see every decision being made in real time, but it all shows up in your numbers. And while many — if not most — financial reports are lagging indicators that tell you what already went wrong, if you’re receiving your financials in a timely and accurate fashion, you can still react faster than waiting a season, a few months, or for your hunches to kick in. Your numbers give you insight into your whole operation, which only emphasizes the importance of them being tight and accurate. 

A common question I hear is, “What if I’m bad with numbers?” or “Should I just hire someone else to handle the basics?”  

Well, you can absolutely hire people to run reports and provide information, but ultimately, it’s still your responsibility to understand it. You don’t need to know how to run the reports, and you don’t need to become an accountant, but you do need some education. 

Personally, I didn’t do well in math in school, and I’ve always struggled with doing calculations in my head. But that’s not an excuse. I found Excel documents, I used calculators, and I thought through what the best benchmarks were, then managed to those constantly. Even though numbers weren’t an area of strength or interest for me, once I became responsible for an organization — or even a department — I understood that this was part of the job. You can’t abdicate that responsibility. It’s core to leadership to understand the numbers and know what to do next with the information they provide. 

When your numbers are clean and within the benchmarks you’re seeking, something powerful happens. A sustained period of clean numbers begins to build the foundation for a more exciting future. That means growth. It means reinvestment. It means all the things you got into business for in the first place. Think back to why you started your company — the dreams you had for your employees, your community, and yourself. Clean numbers are actually the entry point to those dreams. 

This is also when it becomes important to plan, forecast, and do more proactive financial projections. Instead of looking at strong performance as a windfall and running out to spend the money, you now have the opportunity to strategically plan where that capital and profit should go. Good numbers validate the present, and they also give you permission to think responsibly about the future. 

At Nexstar Network, a clear understanding of the numbers has also guided some of the toughest decisions we’ve had to make as an organization, including conversations around sunsetting private equity groups. You may have seen headlines about a decision we made to sunset a third of our members. Those members represented a significant portion of our revenue. What didn’t make the headlines was the thoughtful process underneath the decision. We took time to honor relationships and carefully evaluate the revenue impact on the organization. The headlines caught wildfire, but the reality was far less shocking. The execution was thoughtful and well-planned, from the members who were impacted to the staff who carried it out. We could never have done that if our numbers hadn’t been accurate, or if we didn’t understand what they were telling us.  

Clean and clear numbers can only help you as you grow your business. If you’re thinking about removing or adding a portion of your business, evaluate the numbers thoroughly. Consider the relationships, as well as the bottom line. Create a thoughtful timeline. Don’t belabor the decision, but be respectful of both the dollars and the people involved. When you love your numbers and understand them clearly, you’ll almost always land the decision in the right place.