Mark Richardson, CR, is an author, columnist, and business growth strategist. He authored the best-selling book, How Fit Is Your Business? as well as his latest book, Fit to Grow. He can be reached at email@example.com or 301.275.0208.
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When it comes to evaluating progress or making judgments about a business initiative, if you rely only on your gut feeling, you are susceptible to false positives that lead you in the wrong direction. On the other hand, if you are robotic and analytical, you will miss emotional cues. An important success habit is to balance facts and figures with feelings. For most people, that means learning to rely more on numbers and measurement to achieve a blend and balance that leads to the right answers.
Imagine driving a car with no speedometer or no fuel gauge. How does that make you feel? Are you able to think clearly or are you worried about running out of gas? Do you need to focus on driving at the speed of the other cars because you don’t know how fast you are really going? Chances are you would be uncomfortable and on edge by the time you got to your destination.
The same thing applies to your health or personal fitness, whether it’s caloric intake or amount of exercise or heart rate or body weight. You can’t make the right choices unless you can measure these inputs.
I call this a business success habit because I see it as a distinguishing characteristic of the most successful business people. They know which numbers are most important to their business, and how often those numbers need their attention, be it daily, weekly, or monthly. Key numbers are top of mind, and the secondary numbers are always accessible. These people make taking inventory a priority, and they consistently use numbers to balance their feelings about the people and the processes in their business.
Here are key numbers for your business that I think it’s important to know intimately and to check on at the right frequency interval:
- Leads (number, quality, sources)
- Sales (volume, volume vs. forecast, close rate, average ticket size)
- Gross Profit ($ and %)
- Overhead (budget vs. actual)
- POC (percentage of completion flow, cadence)
If all of these are on track, then profit will be as you predicted. There are more business gauges you can use, but the most successful business people can recite the numbers in the list above off the top of their head. Can you?