You have probably heard people ask this question. But what exactly are business numbers?
You are surrounded by numbers. Whether you track your numbers in a Customer Relationship Management (CRM) system, on your accounting software or just in your bank account, you know how important the numbers are to your business.
You see you don’t need convincing that numbers matter in business. Of course they do. But they have their limitations. Numbers don’t get you more business or persuade customers to part with their money. Numbers don’t keep customers happy. They don’t get you any word of mouth recommendations. And numbers don’t win awards. So do numbers matter after all?
Well yes, but what matters is that you capture the right numbers for you. You need numbers that give you the meaning you need to grow your business to the next level.
If you are a small business owner
you need to know at all times how much money you have, how much you owe and how much you’re owed. You need to be able to predict your cash flow so that you can make the most effective decisions. You have to know the net profit after tax you need to earn this week, next week, this month and next month. And for all those numbers, you know how many sales you need to make and how many leads you need to generate to convert into sales.
But the problem is even if you know all those numbers inside-out, you may still not be able to figure out why your business isn’t growing. Numbers may not be help you get to where you want to be.
So
what numbers will get you to your goal?
That depends on your goal. For example if you are building your reputation around service you need to measure that. How many leads convert to customers, how many truly satisfied customers do you have? How many referrals? How many “Thank you’s” or unsolicited
testimonials?
In reality the numbers that matter most aren’t necessarily the ones that you capture in your accounting system: but you still need a system to capture and report them.
So they key is to focus just on the numbers that help you move towards your goals. When you look for them and track them and expect them, those numbers appear and grow.
Because after all, it is not just numbers, it's the right numbers that matter in
business.If you need help working out which numbers matter in your business please drop me a line.
Noel
Guilford