LEAD 50 - INC. - FEBRUAR Y 2017
When you’re starting a
new business, you can get a
better feel for the numbers
by writing them down
Norm Brodsky is a veteran
entrepreneur. He is the co-author
of Street Smarts: An All-Purpose
Tool Kit for Entrepreneurs. Follow
him on Twitter: @normbrodsky.
times over. By writing the numbers down and doing
the calculations yourself, you begin to have a feel
for the relationships between them. Later on, when
other people are reporting numbers to you, you’ll be
better able to recognize when something’s wrong.
With that in mind, I frst had Anisa look back
over her previous three months of sales and write
down the total on each customer invoice and the
cost of goods sold for every order. The list she came
back with showed that she’d lost money on some
orders and on others hadn’t made nearly enough to
generate the cash fow she needed to survive.
So we began a new routine. I gave her a form
on which she could write down, at the end of
each month, the sales, cost of goods, gross proft,
and gross margin on each of her products both
for the month and for the year-to-date. The
exercise took less than 30 minutes and allowed
her to see what was really going on inside her
business. On a separate sheet of paper, she kept
track of the same information by customer.
What Anisa learned had a huge impact on
her thinking. “It’s like reality hitting me in the
face,” she said. For the frst time, she realized
exactly where she was making money and where
she wasn’t. As a result, she was able to take much
better control of her cash fow.
I wouldn’t say Anisa succeeded because of
I get the sense these days that Anisa is amazed at what she has accomplished, but I could see
this knowledge, but it did help her get through a
perilous period when she was still fguring out
the business. And fgure it out she did. Since then,
That decision, I believe, was crucial to her success. She understood that, to build the kind
of business she wanted, she had to take charge of every aspect of designing, producing, and
marketing her “beauty tools,” as she calls them, especially the brushes. The result is a company
that has won all kinds of awards. It reports more than 25 patents, patents pending, and trade-
marks. Along the way, Anisa has transformed the cosmetics-brush business.
her potential back in 1997. Like many entrepreneurs who come to me, all she needed was some
basic fnancial knowledge and a feel for the numbers, which she gained by writing them down.
R ECENTLY, I HAD A CHANCE to visit a company owned by an entrepreneur who had come to me for advice almost 20 years ago. Her name is Anisa Telwar Kaicker, and she is a designer, packager, and marketer of cosmetics accessories—such as brushes and bags—that she sells to beauty brands, department stores, and high-end specialty retailers. When I frst met her, she had been in business for roughly fve years and was doing about $1.5 million in
sales, but she was having trouble paying her bills. The problem, she
thought, was that she didn’t have enough sales. The real problem,
however, was that she didn’t know how to gather the information she
needed to understand what was actually happening in her business.
I wound up writing a column about her called “Forget Spread-sheets,” in which I made the case for tracking monthly sales and gross
margins by hand, not computer, especially when you’re starting out. I
believed then, and still believe, that if you do this, you can save yourself
all kinds of grief, as well as improve your chances of success a hundred