Measure what you want!
Without numbers to track, it’s like playing baseball in thick fog. You continue to play ball and try your best. But in the fog, you can’t see past first base, where the hits go, or read the scoreboard. This lack of information makes the game rather challenging, perplexing, and dull because nobody knows how they’re doing or who is winning or losing. Without knowing the score, what’s the point?
Measure what’s important to you. Paying your bills, invoicing customers, and keeping your checkbook balanced isn’t enough to get ahead or be the best at what you do. In everyday life, you measure your weight, blood pressure, miles per gallon, the Dow Jones average, who won the football game last Sunday, or the dollar amount on your paycheck. What measurement indicators will tell you if your business is on track, serving your customers, achieving your goals, building wealth, or enjoying your life? Here are some numbers to track and indicators which will tell you if you are building an excellent company:
– Annual taxable business income & profit
– Company Net worth & equity
– Personal net worth annual growth
– Annual income from investments
– Annual company profit margin growth
– Sales from new, loyal & repeat customers
– Profit from new, loyal & repeat customers
– Customer complaints & referrals
– Employee turn-over & training
– Personal time off & vacation days
Aim at what you want!
Start with what you want to accomplish. The number one stress business owners experience is from not knowing where they’re headed. What do you want and where are you headed? Next, how will you achieve your goals? If you depend on hard work to deliver what you want, you’re going to be disappointed every time. Then set up a measuring system to keep track of your progress towards your targets.
For example, if you want to increase your net profit margin, there are many things you can do. You can lower your overall cost of doing business, increase your sales, or charge a higher price for the services you offer. At first glance, most business owners focus on cutting costs. This is futile and won’t work over the long haul. With lower expenses as your solution, you won’t be able to hire better people, add more services for your customers, do the little things that make customers want to give you more work, or help you reach you ultimate goal of more time off or freedom.
The second choice is usually to increase your sales volume by proposing on and winning more business opportunities. Winning more work should increase your total gross profit, but will keep you working at an even faster pace to accomplish the additional projects you have to manage. This is like running on a treadmill faster and faster going nowhere. This won’t move you towards your goal of earning more, working less and living the life you want. But it will keep you busier – is busy what you want?
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