Let’s be honest, for many people, facts and data aren’t sexy and the truth doesn’t always grab the headlines or make for exciting reading. But how do you make the right decisions for your business without facts and data that are accurate.
In business, accurate data is critical to growth, profitability and efficient operational performance. If you don’t know the right numbers, you can’t effectively set up the strategies or action plans which will improve your business. And because business changes so quickly, it’s really important that you keep track of the facts and data on a regular basis so that you can adapt and pivot in a more proactive manner.
Figuring out what numbers to track can also be daunting. Where do you begin? What numbers make the most sense to monitor?
Financials facts and data should be first and foremost for any business owner. Knowing the following numbers is fundamental to running a successful business.
- TOTAL REVENUE
- TOTAL EXPENSES
- PROFIT
- PROFIT MARGIN
- CASH ON HAND or CASHFLOW
- EQUITY
- DEBT and DEBT RATIO
- TAX RATE
- ACCOUNTS RECEIVABLE and PAYABLE
- TOTAL INVENTORY
- NET INCOME
Once you understand your financial position, and depending on the type of business you run might need weekly vs. monthly review, you can move on to getting to grips with the other important data that will you need to become even more successful.
In a digital world, knowing your online metrics is also critical. Understanding the following key performance indicators (KPIs) will allow you a see opportunities to raise brand awareness and also how your digital footprint is performing.
- Unique visitors to your website
- Bounce rate of your emails
- 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
Lead generation activities also need to be measured. Testing and measuring each activity is important so that you can understand what’s working and what’s not. Here are the numbers you should know;
- Number of qualified leads
- Acquisition cost
- Conversion rate
- Lifetime value of a customer
Customer KPIs you should know include;
- Customer retention rate
- Average sale value
- Number of transactions per customer
- Number of items purchased per visit/sale
- Customer review rating
- Net promoter score
There are likely other unique numbers for your business that might also need to know.
Some of your number are more important than others in terms of making the biggest impact on your business success.
At ActionCOACH, we use a formula called the 5-WAYS because there are five numbers which can change the profitability and performance of your business immeasurably.
The 5-WAYS formula is;
This formula illustrates which numbers (those in white) make the biggest impact on your business’ growth potential.
And there are lots of ways you can improve these numbers, we’ve included more than 300 in this document to get you started.
Affecting change to these five critical numbers will have a huge impact on your business’ profitability and growth.
Once you know the important numbers for your business you can build dashboards to track and monitor them. Once you have mastered them within your business, you are more equipped to build new strategies, measure your success and make your own headlines.
If you would like further guidance on getting to grips with the key numbers in your business or find out more about the ActionCOACH 5-Ways system why not book a complimentary strategy call with me?
