Five Questions Every Business Owner Should Be Able to Answer
You don’t need a finance degree to run a successful business. But there are a handful of questions that, if you can’t answer them clearly, probably mean the financial side of the business isn’t working hard enough for you.
These aren’t trick questions. They’re not designed to catch anyone out. They’re the questions that, when you can answer them with confidence, everything else gets easier.
Where will your cash be in twelve weeks?
Not roughly. Not “it should be fine.” Can you see it? A proper cashflow forecast, updated regularly, based on real data, takes the guesswork out of the most important number in the business. If you’re relying on your bank balance to tell you how you’re doing, you’re looking at a snapshot, not a forecast.
What are your actual margins?
Not your quoted margins. Not your hoped-for margins. The real ones, after all the costs, the overruns, the bits that always creep in. Most business owners know their headline numbers. Fewer can tell you what they’re actually making on each job, contract or product line. That’s where margin leaks hide.
How quickly are you getting paid?
Revenue means nothing if the cash doesn’t follow. Your debtor days, the average time between invoicing and getting paid, tells you how hard your cash is having to work. If it’s drifting, that’s not a credit control problem. It’s a commercial problem.
What does your break-even look like month to month?
Not annually. Monthly. Because overheads don’t wait for year-end. Knowing your monthly break-even and how close you are to it at any point changes how you think about pricing, hiring and investment. It turns a big abstract number into something you can actually manage.
If you lost your biggest client tomorrow, what would happen?
Not emotionally. Financially. How long could the business sustain itself? What would need to change? This isn’t about catastrophising. It’s about understanding concentration risk and knowing the business isn’t overly dependent on any single relationship.
If you answered all five with confidence, your financial visibility is in good shape. If some of them made you pause, that’s not unusual, but it is worth addressing.
These are the questions that separate a business that’s managed from one that’s truly understood. And the answers don’t require more complexity. They require the right financial input, delivered at the right time.
If any of those questions gave you pause, we should talk. LBS helps business owners see clearly, plan confidently and make better decisions.
Get in touch with the LBS team.
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