Numbers Discipline

I have written on this topic in a different context in the past but it probably is worth repeating. Every company, however small, must develop a “numbers discipline” when it comes to revenues and costs. For much of my business life, this is not something I bothered to do – and so am assuming that there are plenty others like me! Hence there is a need to reinforce this point.

I used to think that (a) small companies could not estimate accurately about what numbers they do each month or quarter since business is generally unpredictable, and (b) it didn’t really matter whether we met whatever targets we set or not. I was wrong on both counts. And habits once formed become hard to change. Over time, missing numbers becomes an acceptable thing, and that culture then sets in – both on the sales front and on the expenses side.

It took us a long time even after we started to instill the discipline of meeting numbers. There used to be big gaps earlier, but the past six months have seen a dramatic change – enough to deliver for ourselves two cashflow positive quarters. Now, we need to make sure we maintain the momentum.

5 thoughts on “Numbers Discipline

  1. Rajesh,

    Interesting point about small companies. Oftentimes, we grapple with the packaging, model itself early on. The numbers are an imagined outcome of a model which itself is a hypothesisQuestion is – what do you use numbers for ? Revising targets/defining business success or failure, or understanding and fixing the model first ?

    Context : had posted something along these lines recently :


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