After serving many leaders and SME business owners, there is generally a couple common challenges. Perhaps it is finding clients or customers, converting consults, or worrying about having enough money to pay their employees. How can you manage these things? You must know your numbers.
When I say to know your numbers, there are of course different numbers to know. There are Key Performance Indicators that can help you understand where you are with your goals. For example, I keep track of the number of consults to the number of clients, so I know my conversion rate. This (or a similar metric) is vital in most businesses that are looking to scale. If we don’t know how well we are doing at meeting people, having conversations, to converting consults / interested parties into customers or clients, then how do we know if we are even having the correct conversations with the correct people? There are numerous Key Performance Indicators companies can use to help them understand their business. A few may be consult to client conversion rates, lead time (from order to delivery), quality or warranty rates, to even those of you in manufacturing who may have Takt Time or other KPI’s you track. All of these help us understand the current state of our business. Once we know that, we can determine, through benchmarking or other means, how we are doing compared to best practices. If we need to improve these, then we need to have that discussion about what is not working and why with our teams, create action plans we put into motion, and make improvements every step of the way.
Other numbers, and this is where I see most business owners or leaders (any capacity from team leads to some C-Suite), are the financial ones. It is one thing to understand what profit means, or depreciation, etc., but it is another to know what to do with these numbers to improve them. You can’t rely on your CFO, Accountant or even your outside bookkeeper to improve these numbers. This is up to you as a leader or business owner. You need to first understand your Profit and Loss statement and other financial numbers, to begin to improve them. Improving these is also a continuous process. One business client of mine saved thousands of dollars just by negotiating a cell phone bill, because they really did not know what the cost was and that they could negotiate this as a business. By improving your planning, action plans, and implementation through your strategy, values, people, processes and quality, you can achieve better profitability. It starts with you knowing your numbers and where you want them to be.
Here are a couple things to do today:
1 – Understand your numbers and where you are today. This includes Key Performance Indicators and your financial numbers. Don’t have these or know where to start? Reach out.
2 – Create your 1-year goal for these numbers. Then create your monthly goal.
3 – Create actions to help you reach your monthly goals of these numbers.
4 – Review the numbers monthly. If you met them, great! Perhaps increase your goal or leave it status quo for a bit longer. If you did not meat them, analyze what did not work and why. Use this information not as a failure or mistake, but a learning opportunity.
5 – Create your new actions for the next month and repeat.
Having worked in a corporate environment where the majority of my years there had something to do with KPI’s or financials, I understand the importance of knowing the numbers.
If you need help, please reach out, rather then simply watch your business stay where it is or worse. tara@twinlifecoaching.caor www.amplifyingleadership.ca.
Written by: Tara Lehman
Image from Microsoft Stock Images
