How Do You Know You’re Winning If You Don’t Keep Score?
In sixteen years of working with women entrepreneurs, I think the comment I’ve heard most often is, “I just don’t like numbers.”
So many women believe they’re bad at math, or just don’t like it, that they avoid learning about their business financials.
So I’ll get right to the point: if you don’t understand your numbers, you’re sunk. And that’s silly, because you don’t need to be an expert in math to learn this.
So jump in! Learn how to keep score and increase your profits with my free webinar.
Make sure to download your free handout before watching the webinar.
Key Strategic Indicators are:
- The things you need to measure daily, weekly, monthly, quarterly or annually.
- The signals that tell you if you’re going in the right direction or wrong direction
- The information you need to make good, timely decisions
- Helps you spot trends to take advantage of
- Helps you prevent serious problems
- Helps you create efficiencies
- Helps you increase productivity
- Helps entire team know the results of their efforts
Are you measuring the right things?
- Short Term Measures vs. Long Term Measures
- Input Measures vs. Output Measures
- Basic Financial Measures
- Non-financial Measures
- Profit per “X”
What to ask yourself:
- What results do I want in 90 days?
- What results do I want in 1 year?
- What results to I want in 5 years?
- What activities cause sales?
- What activities cause increased expenses?
- Which numbers make profits increase or decrease?
Which 3 key measures will you commit to track?
- Any activity that causes sales (weekly)
- Total expenses as % of total revenue (monthly)
- Marketing as % of total revenue (monthly)
Create a simple dashboard that’s updated weekly
Businesses don’t succeed or fail without clues
Commit to measure three things for three months
- Gross revenues
- Net revenues
- Cost of goods/services sold
- Gross margin (total sales revenue – cost of goods sold ÷ total sales revenue)
- Gross profit
- Mark up percentage
- Percentage of uncollectables
- Labor costs as % of sales
- Assets to liabilities ratio
- Receivables (and as % of annual revenue)
- Sales days of receivables
- Selected expenses as % of revenue (what’s your Achilles heel?)
- Dollars in reserve
- % of billable hours actually billed
- Marketing dollars as % of total sales
- Website hits
- New e-news signups per week/month/year
- Open and click-through rates on e-mail marketing
- Number of social media followers
- % response rate on direct mail or email
- Number of event registrations (and % of total invitees)
- Number of networking events attended
- What causes sales?
- Number of phone calls, appointments, proposals, etc.
- Number of sales
- Number of new clients
- Average sale per client
- Number of clients
- Number of referrals
- Lead or proposal conversion ratio
- Days to close leads
- Customer retention rate
- % of complaints
- Lifetime value of a customer
- Dollars generated per square foot
- Payroll as % of sales
- Number of billable hours
- Billable hours as % of total billable hours available
- Benefits costs as % of revenue
- Delivery costs
- Shrinkage (in dollars & % of inventory)
- Days to shipping
- Sales per square foot
- Shipping costs (and as % of revenue)