Let’s talk about you and me
That got your attention didn’t it, If I had said let’s talk about numbers then 68% of you would have skipped to the next post, and that’s a pretty accurate number because, with enough data everything is pretty predictable so yes 68% of business owners mostly ignore the numbers.
What’s more the 28% that do look at them are generally looking at the wrong ones.
Numbers are half of running a business, not a small part or an inconsequential part, its half, even those of you that don’t like numbers can grasp the importance of that right?
Yes, I know that you know what’s in the bank, but I am not talking about your bank balance and I am not really talking about revenue, profits and cash either, nor am I really talking about balance sheets, (although these have a place and play an important part) as your accountant often makes you look at these.
Every business is a machine made up of people and a culture designed to do just one thing, produce cash. To fine tune that machine, you need to know which parts of the machine need attention and the numbers are the only thing that can tell you that.
A Business that is optimised for producing profit and cash has a very effective sales and marketing approach, a very operationally efficient service and they are very proficient at the finances and all these parts are about the numbers.
Number of leads per day, week or month, cost per lead, per channel, per campaign, your cost of acquisition, lifetime value of a customer, your sales conversion ratios, your profit per sale per marketing campaign, average sales cycle, lead to sale time, and this is just a very high level look at some of the numbers you could look at in just your sales and marketing approach.
It is quite obvious that a business can operate with out paying attention to the numbers otherwise I would never hear the “I have to ask the accountant” response when I ask about year-to-date profit and yet, this is such an incredibly risky way to run a business, yes you can be lucky for years before it finally bites you in the arse but it usually does at some point and I have heard so many horror stories that could all have been avoided if the owner had just been paying attention to the right numbers.
And there is the crux of the problem most business owners did not go into business to get bogged down in the data, they wanted to create a better construction company, pioneer a new engineering concept or deliver a better service in their field, and yet all of those things are measurable, not just are measurable they should be measured if you want to be better at something than the competition, or prove your new way of doing something is really an improvement on the old way, or even to prove your service is better, by what standard will you prove it? Because it’s easy to say you are better, newer or give great service but its just bluster if you cant quantitively prove it.
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