“Why are my results the way they are?” and “How can I change my results?” are two questions small business owners should be asking all the time? And you should be asking these questions with the intention to really understand what is going on and how can it be changed for the better, not as a passing question with no plan to find out when things aren’t going as you had hoped.
Asking why and what can I change when you have no plan to find out is either hope as a strategy or the prelude to a grueling set of actions to make a change with no clear idea what is going on or what success looks like. This confusion and lack of direction can even happen in one person businesses. If you’re one
of these business owners, you’re by no means alone and there are several solutions, but the one that ties them all together is to run your business by the numbers.
Is your business getting these 8 essentials right?
Take the Assessment to Find OutI have found that most small businesses don’t spend the time to develop key success numbers for their businesses and so it’s impossible for these business owners to know what is going on in their business or to develop key steps forward to change the results they are experiencing.
Typically, the reason for this situation is that the business owner is too busy running the business to make the time and they don’t see the value.
When a business owner starts to work with their business’s metrics, they are astonished at what they find out and then they ask the magic question with intention; “how can I change that?”
- An owner of a social services company installed practice management software with significant capabilities. When she looked at the numbers the system generated, she had some major questions and concerns. Armed with real information that was going on in her business, she was able to ask the magic questions with intention “why is this happening?” and “how can I change these results?” When that happened, things changed. She was able to significantly increase work team profitability, work team and individual productivity, develop a model for fixed cost management and reduce an expensive turnover rate. The difference to her bottom line was enormous.
- After Implementing an actual v plan Scorecard Review System and a highly refined quoting process, the owner of a small manufacturing business was able to double his gross profit percentage, create a net operating income of 25% of sales where it had been breakeven the year before and manage his cash flow so he knew where his cash was going to be 3 months in advance or longer. He is now working on client, vendor and product profitability to continue to
improve his results. - There were several single person business owners I know who gained real clarity about what it
would take to hit target profitability (some of whom had to develop a target profitability).
Simply, the number of sales needed at what price, the number of conversations/presentations to make a sale, the number of appointments to get a conversation, the number of leads to get an appointment, and the amount of marketing it would take to generate those leads. When these numbers were developed and understood, the actions that needed to be taken were clear. They now manage actual actions and results to planned actions and results. This changed their businesses and their lives.
Are you in control of your numbers? Did you gain any insight from any of the above examples? You may be terribly busy running your business, but find a way to develop metrics for your business. When you do, you will be less busy, and you will be making more money.
