How to manage the numbers

How to manage the numbers, easily and effortlessly

One of the challenges which I faced back in the days when I was running my B&B as a hobby, and not a proper business, was the books and the numbers.

Being a complete dunce when it comes to maths, I knew that I would get confused, but I still didn’t do anything about it.  Instead I just ignored it and hoped it would all just go quietly away.  But of course, it didn’t, and everytime I thought about it, I got a sinking feeling in the pit of my stomach.

Ugh!  Can you relate to that?

Without having a handle on the numbers, I had no idea whether I was making any profit, covering my overheads, doing better than last year, or anything at all!  It was crazy.

So during the “waking up” period of my life, when I realised that my ever-demanding hobby had to start paying for itself, ie: growing up and becoming a real business, I faced this challenge head on.

Here’s what I did:

Spreadsheets, yes I hear you…. There are just four that I’ve found that I really need:

  1. Occupancy rate: how many nights booked per room
  2. Weekly bookings taken by channel, ie: online, telephone, email and doorstep, plus those I’ve turned away, just so I know whether demand is growing or not
  3. Cashflow – weekly and projected
  4. Revenue and expenses

I record all of this on a weekly, sometimes daily basis as things change quickly in this business, and then I give all of that to my accountant at the end of the month, and she sorts out how much tax I need to pay, what I write off etc.

I try to keep it simple.  What do you do?

 

I help serious Bed and Breakfast owners make more money and have more fun.  If you’re ready to grow your B&B business, then click here for more details.

9 Responses to “How to manage the numbers”

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  1. Yvonne

    Given how long we have known one another, your first admission was shocking! But I know where you were at and why. I used to be an accountant for 20 years, as you know, for my sins. Many of my new clients would say things like “I’d rather go to the dentist than to the accountant!” Now, I HATE the dentist. Or I used to until I found a professional I could relate to and in whose hands I felt safe and pain-free. The same can happen with the right accountant.

    All us small business owners need an accountant who speaks our language, and makes us feel safe and accounting pain-free. This system you have in place of spreadsheets which pass between the two parties each month is ideal. I hope you are getting swift feedback in case – heaven forfend – they dont understand your maths as you don’t want to have to wait a year for that info.

    My advice to all newbies is find an accountant you can work with and keep looking until you find one you love, like my dentist. As then so much of this “pit of the stomach” stuff can be alleviated in a heartbeat.

    Yvonne – good advice to your B & B owners. Keep up the good work. Its best to coach people from a place we know well, isnt it?

    J

    • Yvonne says:

      Thanks Judith for taking the time to comment. It is so important to get the right help, as you say. And an accountant is no exception. I still don’t believe I’ve found the right one for me, but they’ll do for now, while I’m still searching. Thanks again 🙂

  2. Jan says:

    Hi Yvonne, I may not run a b&b but I can see how this is also true for a lot of self employed people. It’s so easy to stick our heads in the sand than to see it black and white, and then get shocked when it’s not working.
    Timely advice that deserves to be handed out with all start up notes – thank you Jan

    • Yvonne says:

      Thanks Jan for taking the time to comment. Every business is different and it’s important to know what are the numbers that matter for your business. I’ve highlighted the ones that matter for me and my B&B business, but they will be different for different businesses and it’s up to each of us to find out. Otherwise, as you say, there might be a shock! Thanks again 🙂

  3. Hi Yvonne
    Very sound advice for any business, as Jan has said. I’ve been self-emplyed for 10 years, and still haven’t sorted out an ideal system for my accounts. I think I’ve finally managed to get the spreadsheets I use as I want them (with the help of a fab book keeper) – all I need to do now is get into the habit of updating them all regularly.
    Sarah

  4. I spent much of my career in the not-for-profit sector and for years they have had programs that gather information that gather a wide variety of sortable data for fundraising purposes. Based on that knowledge, I looked for a bookkeeping program that allows me to record all that information in one place – Quickbooks Pro allows me to very easily track all the information except for how people arrived at my door.

    Up until this year, I have tracked walk-in traffic ( it is 11% consistently). Since over 80% of my bookings come directly from the internet, I think it is safe to say that the web would impact 95% of all my traffic. For those spur-of-the-moment decision makers, I believe word of mouth from local people and mobile phone web research play a big role with walk-in traffic. I would love to understand why you think the source of the booking is important – and how you use that particular piece of information? (Hmmm…another blog post, perhaps? 🙂

    • Yvonne says:

      Thanks for your comment Susan, I appreciate you taking the time. Your book-keeping skills are admirable, and we both know how important that is. I always record what channel of contact people use because it helps me to determine where I spend my advertising/promotion money. I always ask my guests how they found us, but most of them can’t remember, except to say “online”, but even those who’ve found me online, sometimes want to call me, or email me to check availability, so I think it’s important to have as many channels open as possible. When I compare my numbers today to 6/7 years ago before the internet came on the scene, there has been a huge shift to the speed and ease of using online technology. It makes me wonder what will happen to the local Tourist Office in the future. 6/7 years ago, almost all my bookings came via them, and today, none. Thanks again 🙂

  5. Liz says:

    I think for many people the realisation of what started off as a kitchen table project is now a fully fledged business is pretty scary. That’s why its good to start from the beginning with some systems in place that will grow as your business grows.

    • admin says:

      Thanks for your comment Liz. I agree. And the even more scary part is when we don’t acknowledge that our “kitchen table” project has grown into a business and we try to keep it small. That’s when there’s a danger that we run out of steam. In a sense we have to “let it fly”, and that too is scary. Thanks again 🙂