Somewhere along the way I heard a saying, “You can’t know what you don’t measure and you can’t change what you don’t know.”
Over the years of being self-employed, I have become very reliant on data about my business. I keep a spreadsheet with multiple tabs, including a goals tab and a summary tab, where I can view at a glance, our income and expenditures for each month of the current year.
I’d like to say that having this information handy is superbly useful in a financially measurable way. It is, sometimes, but the value that data holds for me is as much about maintaining my confidence as it is about increasing our bottom line. If you’re on the road of self-employment, you already know that most of the obstacles we face are psychological – the biggest offender being the bully of self-doubt.
How do spreadsheets help me battle self doubt?
Here’s the scenario, based on actual events:
We have a slow month. I stare at our sales total for that month and can’t ignore that it’s significantly less than it was the last several months. Self-doubt creeps into my head and says “Well, this is finally it. No one likes you anymore. They’ve found something better. It’s only going to get worse. May as well start looking for jobs.” Then, I think to myself “I wonder how we did in this month last year.” So I look it up, because I’ve been keeping track. Same dip. Self-doubt is weakened. Then, the knock-out punch: I ask another shop about their sales. SAME DIP. We’re not failing, we’re just experiencing an annual local retail dip. Self-doubt is finished and I can go on with running my business.
I could tell many stories like this – feelings of fear and doubt being managed and tamed by hard data. Number’s don’t lie and larger trends are much more important and reliable than any instantaneous snapshot.
Another way this data is helpful is that it allows me to stop doing things that don’t work. As an independent professional, my energy is a very precious resource. The reason I work for myself is so that I can call the shots and design my life. The moment I let myself become over-extended, I sacrifice the freedom I’ve worked so hard to build and I may as well go to work for someone else. A great way to avoid this is to look at the numbers. Similar to the way that product-based businesses discontinue products that don’t sell, I need to discontinue pieces of my business that aren’t giving me an adequate return on my energy.
So you see, it’s not all about money, but tracking numbers and data over the life of your business in incomparably useful in knowing what patterns to expect and how to confidently invest your energy. Do it.