Using Data Wisely to Grow Your Business
Key Components in a Business – Part 3
I am not sure who likes numbers, outside of accountants, but then again, they are the lifeblood of your business. All great business leaders rely on a handful of metrics to manage their business.
When I started my first company, I was flying blind. At the end of the month, I would look at the P & L, trying to figure out what we were going good vs. bad. (At the end of the day, I don’t even think I understand my P & L quite honestly.)
I got into business because I liked the product that I was selling. I believed it did good, and I was extremely passionate about it, doing whatever I could to sell more, grow, etc. However, I didn’t really understand my numbers. I would say that in the first two years of business, I was running around like a crazy man without full visibility.
Putting It All Together
It wasn’t until I bought a self-storage facility that I realized how important it was. I paid $2,400 a month for an online marketing resource. For two years, I paid that bill each and every month. Then, I started asking myself, “Am I getting value for what I am paying?”
Next, I asked the online marketing source to prove to me the number of leads we were getting. At the end of the day, it was not a great deal. I was not getting enough leads, none the less sales, to justify the cost. Therefore, I cut that cost completely and reinvested the $2,400 into another form of advertising.
This time I tracked those marketing dollars from day one. I knew who I wrote the check to, and I got insight on a monthly basis on how many leads I was getting. I was getting four times the leads for the same price.
Then, I put in a scorecard to track how many leads closed. That method is how I managed our manager. I knew that we should be closing about 75% of those qualified leads. I was able to use my scorecard weekly to verify how many leads I was getting and simply see how many were closing.
Do you have data that is helping you run your business, or are you running blind? Do you know which of your employees are your best performers? Do you know which products are your best sellers and which ones aren’t? Are you tracking your expenses and using data to tell you where you can cut or save money?
Hopefully, there is a data component guiding your decisions.
If not, you can utilize the scorecard as a weekly report that shows five to 15 of the high-level numbers for your organization. Once you find out what numbers matter in your business and track them each week, you won’t have to wait for the P & L to tell you how well you’re doing.
Wealth of information that has tremendously changed the way I do business. Thanks so much
Thanks for helping me decide on data for my business