With SO MANY numbers floating around your business (not to mention your QuickBooks!) it can be overwhelming. Which numbers really matter? Which ones should you be keeping track of?
I’m a big believer in tracking the numbers you want to grow! By looking at them regularly, you’ll get multiple benefits:
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- Know how you’re doing today
- Measure the impact of things you’re trying out
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While some of the specifics vary by industry, here’s my list of the top 5 things I track in my businesses, so that I can grow them faster.
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Revenue
How much money is coming in the door? How does it compare to your goal? I’m sure you look at this, but do you track it consistently? That’s how you get the best results. Ideally look at your revenue every week…every month at a minimum. (Not just when it’s time to file taxes!)
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Profit
I work with a lot of businesses that are bringing in a lot of revenue, but mysteriously not much is left over as profit. At the end of the day, this is the bottom line, financially speaking. All of the other numbers are important only because they help predict profit.
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Number of Customers
This is related to revenue, but it’s often easier to visualize, so it’s good to track. If you’re not reaching your revenue goals, you need to figure out how to bring in more customers. Then, when you do your marketing, you can immediately see how effective it is by how many additional customers come in.
Also, calculate how many customers you’ll need to reach your revenue goal. This gives you a great target to reach towards.
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Sales Conversion Percentage
What fraction of your prospective customers buy? For a retailer, how many of the people who walk into your store end up buying something? 20%? 60%? If you do seminars, how many of the participants join your email list? How many of your initial consultations sign on as clients? What percentage of your customers become repeat clients?
These measure how effective your sales process is. Everyone’s sales process can get better! Try different things and watch the impact they have on these conversion percentages.
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Customer Satisfaction
Everyone knows happy customers are the lifeblood of a business, but how many businesses actually measure this? You can read my article about the most “scientific” ways to do this, but it’s really easy to start. Make a quick survey asking for a 1-10 rating, and place printed survey cards by the cash register or email the survey to past and present clients. Be sure to leave room for comments so you know what to keep doing and what to improve.
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Action Plan
Here’s how to make tracking the numbers easy. Draw a grid listing the key numbers down the left, and the dates you will check in across the top. Do this on a whiteboard, in Excel, or even on a piece of paper you tape to the wall next to your computer. This is your “Management Dashboard”:
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| Number to Track | Jan 31 | Feb 28 | Mar 31 | Apr 30 |
|---|---|---|---|---|
| Revenue $ | ||||
| Profit $ | ||||
| # Customers | ||||
| Conversion % | ||||
| Cust Satisfaction |
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Each time you write the new numbers in your dashboard, ask yourself, what did I do differently to get these new results?