Today I’m going to give you a simple challenge that will take five minutes to implement each week but can save you a ton of wasted time and energy that you can leverage into profit.
Do you know what the most important numbers in your business are? What comes to mind when I ask that question?
Profit? Sales? Expenses? Ultimately these are the most important numbers but these are actually a ‘result’ of other numbers in the business, rather than ‘raw’ numbers themselves.
Profit is a result of sales minus expenses. Sales are the result of generating X number of leads and converting that to business. Generating X number of leads is the result of marketing yourself to a potential audience of Y. And so on it goes.
For every number in the business you can find other numbers that feed into it. They all finish at the same point though and determine what your profit is.
So if you are interested in increasing your profits, you can actually waste a lot of energy playing the wrong numbers in your business. You might try to sell more stuff (products or services) when you might actually be better off just increasing your prices. You could decide to increase your advertising spend when you might be better off improving your conversion rate on the leads you are already generating. And so on…
The number of numbers you can play with is huge but the more you know your numbers, the better you’ll become at working out which ones are going to give you the best results. In fact you might have heard the saying: “What isn’t measured can’t be managed.” In business this is so true so if you really want to manage your business, you need to start measuring otherwise your it could be more of a lottery than a business.
So what I invite you to do, is to commit to five minutes each week to identifying a new number that you are going to track or calculate in your business and set up a new habit of collection. Each week add a new number and a new collection habit and within ten weeks you’ll have ten new metrics that you can use to find the leverage points in your business.
Initially, the numbers may be meaningless but as you observe them over time, you’ll find trends emerging and you’ll understand relationships between different sets. If you don’t know how to make meaning of the numbers yet, that’s fine, it’s the habit of collecting them that matters most at this point. (I can help you make meaning later – see below for a note on that)
Below is a selection of numbers that you might want to consider tracking or calculating on a regular basis (go for weekly or monthly).
Pick the low hanging fruit, the easiest numbers you know how to collect and track them on a spreadsheet if you can or, if spreadsheets make your head spin, just do it on paper.
No doubt you will come up with other numbers that are suitable for your business. You know your business better than I do so follow your own instincts on that.
And if there are questions arising once you’ve collected some data, put your questions below drop me a line and I’ll be happy to go into more detail about how to make it useful.
Good luck with it and don’t get too bogged down in it – five or ten minutes per metric should be plenty. And when you get tempted to let it slide or put it off, just remember, what isn’t measured can’t be managed.
Do you avoid the numbers in your business or do you understand the value already? Comments and questions are welcome below.
Any tips to share on how you ‘make more time’? Drop them in the comments below.
I've been self-employed since I was 19 (and that was quite some time ago) and have owned manufacturing, service and consulting businesses ever since. Every business goes through stages and each stage in each business needs a different strategy to flourish and prosper. I can teach you about the stages and the strategies to shortcut your success.