Numbers are your best friend in business and yet time and time again I come across business owners who are running blind. They simply don’t know the numbers in their business. And since they don’t know their numbers they don’t know if they are on track to achieve their goals or not.
One of the reasons many business owners are not looking at their numbers are that they are afraid of what they might see. But trust me, taking the ostrich approach and sticking your head in the sand is never a great option. Sure, it might work in the short term but in the long term if your business is losing money each and every month you will soon go bankrupt.
Knowing your numbers helps gives you visibility in your business to know what is ahead and based with this knowledge you can make changes. So for example, if your budgeted to make £10,000 in sales this month and three quarters of the way through the month you realise that you have only banked £5,000 then you can take corrective action. For example you could have a sale of your products to generate some additional revenue or could launch a new product or service.
You see knowledge gives you choices about what to do. It helps put you back in the driving seat of your business – fully leading it- rather than the business running you.
Still not convinced. Here are five ways that tracking your numbers will benefit your business:
1. Know how far you are from reaching your goals.
Scores of research prove that individuals and organizations who set goals are much more likely to achieve them. However, to achieve a goal, you must be able to properly measure your progress. By understanding how your business is doing in both revenues and profits daily, you can tell if you’re on track to achieving your goals and adjust your plans as needed if you’re not.
2. Pinpoint and manage key underlying issues.
There are a handful of smaller activities that effect larger results. For example, the following are often key underlying issues for sales:
- Number of outbound sales calls
- Number of live connections
- Number of proposals given
- Proposal close rate
- Average price per sale
When sales are low, most entrepreneurs don’t know what to fix to see improvement. By tracking each of these numbers, you can instantly know what to fix.
3. Discover problems before it’s too late.
Most entrepreneurs have a bad sales month, then look back to determine what caused it. Had the entrepreneur tracked his numbers on the underlying issues, he could have fixed the problem early on. For example, he might have learned that the number of proposals issued in the first week of the month was low, and made sure more proposals went out the door.
4. Quantify success and failure.
By understanding and tracking your numbers, you can measure whether your business is performing well. For example, if your sales team made 500 outbound calls already, your number of customer complaints is less than 10, and your average delivery time is less than seven days, you can rest assured that your business is running smoothly.
5. Offer team members more constructive feedback.
Tracking and publishing your numbers tells team members what’s important. For example, if you track customer satisfaction, number of refunds, and average customer hold times, your customer service manager knows precisely how he is being judged and what to improve.
One final thought. Don’t just look at your numbers to determine what needs fixing. Use them to pinpoint what’s working well in your business and do more of that. A great tool is to create a business intelligence dashboard that contains all the key metrics that you need to run your business in one place.
Remember: what you measure you treasure. So if you really want to start making more money in your business start paying more attention to the numbers on a daily basis. You’ll be so glad that you did.
And if you’d like help to Accelerate Your Business Profits then please request a complimentary strategy session. I offer a limited number of these each month so apply for one here
Julia Felton (aka The Business Wrangler) is the founder of Business HorsePower. Business leaders, entrepreneurs and executives hire her to accelerate their business performance by harnessing the energy of their people to work more collaboratively together. By aligning purpose with actions the team achieves exponential results as everyone starts pulling in the same direction.
Julia believes that business is a force for good and through designing purpose-driven businesses that leverage the laws of nature, and the herd, you can create businesses founded on the principles of connection, collaboration and community that make a significant impact in the world.
