Steve Mills- Posted on
Understand your numbers
I’ve spent nearly 30 years helping small businesses to become more successful. I’ve worked with thousands of businesses in hundreds of industries, and to be honest, you don’t have to be Einstein to work out what works and what does. In this blog post, I’m going to list what I believe of the top five tips for being successful in a small business.
Number one – Your Numbers
Number one in every sense of the word is to measure the results. When I work with 99% of my clients none of them have any clue about the key numbers and as the old saying goes…
“numbers are the currency of business.”
Now, I want to be clear: I’m not just talking about financial numbers, although these are essential. I’m also talking about marketing numbers, sales numbers, and also operational numbers.
We all know that we need an understanding of our financial numbers
Certainly one of the most important tips that I can give you is to improve your financial acumen. In other words, your knowledge of the financial side of your business.
However, you also need an understanding of the marketing inside of your business.
- How many leads did you create this month?
- Where did those leads come from?
- How many people visited your website?
- How many contacts have you got on LinkedIn?
These are all important questions that you should be asking yourself on a weekly or at least a monthly basis.
We then turn to our sales numbers.
These are numbers like the number of enquiries that you convert into meetings. Key numbers include:
- The number of meetings that you convert into sales.
- Your cost of acquisition.
- How much does it cost you to acquire a new customer?
- The lifetime value of a customer. In other words, once you’ve required a customer,
- How much is a customer going to be worth to you in terms of how much they spend, how often do they spend it, and lastly how long do they stay with you?
Lastly, there are your operational numbers.
These are numbers like:
- How long does it take to fulfil an order?
- How long does it take your team to undertake a given service?
- What is the profitability of that service?
- Are you making money or losing money?
Get ready for tip No.2. It is very powerful, but for now:
- Decide what numbers you are going to measure
- Measure those numbers
- Review those numbers
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