My client called because he was going to have to skip his paycheck this week. Something that hadn’t happened in a long time.
“Brad, I used to be able to keep track of my business in one spreadsheet. I had my pipeline on one tab, and my income on another tab and my expenses on a third tab and I knew where everything was! But now I’ve got a CRM, a bookkeeper, and a whole team and I can’t keep track of anything!”
How do you know what your systems are telling you when you aren’t the one putting the data in? How do you know that things are done right when you don’t touch them?
You need a Rule of Thumb
In most businesses, there are relatively few pieces of data that tell you how the whole rest of the business is performing. You don’t need to look at every number, or every system to know how your business is doing. You can focus on just a few.
- For an attorney we tracked the total number of active files — more active files mean more billing.
- For a web design firm, it was looking at the average days a project had been open. The quicker they were turning round projects the more profitable they were.
- For an SEO firm, it was the number of audits they were conducting compared to the number of clients lost each month. As long as audits exceeded lost clients the business was growing.
Once you know what the key numbers are that you need to track you can make a spreadsheet, or whiteboard, or email report, that can act as a dashboard. Keeping those few key pieces of information in front of you so you can keep your eyes on the road ahead.
Oh, and that client I mentioned at the top, he didn’t miss his paycheck. Digging into his numbers we found where the cash was getting held up and after he made a few calls, he had all the cash he needed to make payroll this week, and in two weeks!
What is one key number you are tracking for your company? What does it tell you and what do you do when it’s not what you expect?