Are You Playing By The Numbers?

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While I do know a few business owners who are absolutely religious about tracking their business’ performance, most small business owners tend to use the gut check method of monitoring the health of their business.

Numbers

I get it. Numbers aren’t fun or sexy. They aren’t interacting with the customers, creating new product offerings or coaching the employees. But, without an understanding of the numbers – those opportunities go away pretty quickly.

Think of it this way. If you were going to build a house, how would you know how much lumber to buy if you didn’t have a blueprint? Before we can craft a marketing plan or create marketing tools, you need to know what you’re trying to build.

I’m not suggesting that you spend hours every day pouring over the numbers. But, if you track just a few of the key indicators, you’ll always have your finger on the health of your business.

Do you know the answer to these questions?

  • What is your sales goal for the rest of the year?
  • How will you measure/track that goal?
  • What percentage of those sales should come from current customers?
  • From new business?
  • What is your ratio of gross sales to cost of goods sold? (What percentage of your GS is left for you to spend = Adjusted gross income or AGI)
  • What’s your monthly overhead cost?
  • What’s your monthly salary/benefits cost?
  • By client, how profitable are you?
  • By product line/service, how profitable are you?
  • How have your business sales trended over the past 3 years?

If you already know the answers to these questions – excellent. But, if you are like most business people, these are not something that just trips off your tongue. And yet you make decisions every day that really need this sort of insight.

Isn’t it time to know for sure?

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