Facts and data aren’t sexy and truth doesn’t always get headlines. It’s easier to get attention through miss information or exaggeration. But what does that due to credibility and reputation over time? And more importantly, how do you make decisions without facts and data that are accurate.
In business accurate date is critical to growth and smooth operations. If you don’t know the right numbers, you can’t effectively set up strategies or action plans to make improvement. Since business changes so quickly, it’s imperative that you keep track of the data so you can adapt, pivot as quickly.
Figuring out what numbers to track can also be daunting. Where do you begin? What numbers make the most sense to monitor?
Financials metrics and data are the first line of defense and offense for a business owner. Knowing the following numbers are fundamental to running a successful business.
- TOTAL REVENUE
- TOTAL EXPENSES
- PROFIT MARGIN
- CASH ON HAND or CASHFLOW
- DEBT and DEBT RATIO
- TAX RATE
- ACCOUNT RECEIVEABLES and PAYABLES
- TOTAL INVENTORY
- NET INCOME
Once you know your financial position which depending on your type of business might need weekly vs. monthly review, you can move to other important data to help you be even more successful.
In a digital world, knowing your online metrics is critical. Understanding the following key performance indicators will give you a glimpse into the opportunities to raise your brand awareness and reach and how your digital footprint is performing.
- Unique Visitors to your Website
- Bounce Rate of your Website
- Time spent on Website
- Number of Sessions for unique visitors
- Pages on your Site with most activity
- Social Media Engagement and reach add an additional layer of information to help grow your business…
- Followers, New and existing
- Engagement (Shares, likes or comments)
- Video Views
- Post with most engagement
Your Lead generation activities also need to be tracked. Tracking is very important and to maximize your efforts you will have to know the following numbers…
- # of Leads (qualified)
- Acquisition Cost
- Conversion Rate
- Lifetime Value of a customer
Customer Experience also has key indicators;
- Customer Retention or Repeat visits
- Average Sale
- Number of Transitions
- # of Items purchased per visit
- Customer Count per daypart
- #of reviews or five-start ratings
- Net Promoter Score
There are likely unique numbers for your business that might apply, there are only a few of these numbers that can help you make the most impact on your business.
At ActionCOACH, there is a formula called the 5-WAYS which makes the process of where to being easier.
The 5-WAYS formula is;
# of LEADs x Conversion Rate = Number of Customers
Number of Customers x Average Dollar Sale x Average Number of Transactions = Revenues
Revenues x Profit Margins = $ Profits
This formula illustrates which numbers really make the biggest impact on your business’ growth potential. The most impactful of these are # of leads, average sale, number of transaction, conversion rate and profit margin.
Check out this easy chart for specifics on how you can affect change in these critical key indicators and make a massive impact of your business’ profitability and growth.
Once you know the important numbers for your business you can build dashboards to track and monitor them. When you are the master of facts and data within your business, you are more equipped with evidence to build new strategies and measure your success and make your own headlines.