Think As Inc

RUN THE NUMBERS

October 2, 2009 on 8:58 pm | In life coaching | No Comments

Running the numbers means quantitatively measuring what’s important.  If a company wants to develop a new product, it might run revenue numbers to see how big the market is for the product, run cost numbers to see if they are bearable, and run profitability numbers to see if the new product is worth pursuing.  As CEO’s of our careers and lives, we should run the numbers:

Run your revenue numbers to understand your market value.  What are jobs in my industry paying?  What about similar jobs in different industries or different jobs in my current industry?  Am I generating the right revenues for my experience, skill set, work load, ambition?

Run your cost numbers to manage your expenses.  What do you spend on necessities (e.g., food, clothes, housing) and luxuries (e.g., cable, dining out, entertainment)?  Are you withholding properly for taxes and taking advantage of tax-deferred retirement offerings or flexible spending accounts?  Do you have updated insurance quotes for your home, car, life, and other policies?  Are you getting the best rate on your mortgage, car loan, etc? 

Run your profit numbers to optimize your personal bottom line.  Do you save each month or spend more than you earn?  Do you need to start or increase your emergency fund?  How are your investments performing?  Do you need to increase revenues or decrease costs to feel better about your personal finances?

Successful businesses don’t just pick strategies randomly.  They run hard numbers.  Likewise, don’t manage your life without quantifying those measures that are meaningful to you.  If you expect a raise, know exactly how much you require to be ecstatic, satisfied, or ready to leave.  If you want to purchase a house, know exactly how much you’ll need.  Run the numbers, and make proactive, informed choices.