Key Numbers: The Secret to Working Smarter

Understanding your key numbers is essential to growing a successful business.

Yet, sometimes the numbers move so fast it feels like you’re trying to catch lightening in a bottle.

You want someone to boil the information down into simple, easy to understand bullet points, so you can quickly make financial decisions.

Can you afford to buy a new computer?

Is it time to hire another employee?

Should you pay cash or finance a new car?

You’ve asked your bookkeeper to explain the numbers on your financial statements, but she focuses on the transactions not the overall big picture.

You’ve also asked your tax accountant to help, but he focuses on deadlines and maximizing your tax deductions.

Even though the information your bookkeeper and tax accountant provide is important, you still need to understand your key numbers, so you can make informed decisions and grow your business.

How can you use key numbers to grow your business?

Numbers that are understood and tracked are more likely to be improved. In other words, you can only fix what you know is broken.  Don’t wait until you run out of cash to find out your business is broken.

There are key numbers in your business that are easy to track. They will help you work smarter, because you’ll know exactly where to invest your time and money.

3 types of numbers you need to track.

1. Vanity numbers give you bragging rights at networking events and online forums. The numbers are kind of useless when making business decisions, because they only represent the number of “window shoppers” you have.

Here are a few examples:

Website visitors                                             Business cards exchanged at a networking event
You Tube views                                             Request for proposal
Twitter followers                                           Entry forms at your trade show booth
Facebook likes

Don’t get me wrong…window shoppers are a great, because an increase is a sign your hard work is paying off.  Vanity numbers are important to track, but don’t stop there. Converting the window shoppers to Bankable numbers is vital to your financial success.

2. Bankable numbers measure the actions taken by the members of your tribe. The numbers help you prove your sales funnel is working or not working, so you can make changes.  They allow you to make predictions, plan for growth and find ways to make more money.

Here are a few examples:

Email list
Opt-in rate
Client list
Conversion from lead to buyer
Client retention rate
Webinar registrations
eBook downloads

Bankable numbers allow you to calculate one of my favorite numbers: cost to acquire new client.  If it costs you $125 and it takes you one-year to acquire a new client that yields a profit of $7,500 over the next two years, then you are on the right track and the numbers will sing your praises.

3Critical Financial numbers provide vital information necessary to operating a successful business. The numbers measure your efficiency, profitability, and the likelihood of future success. Your business and employees are easier to manage when you are armed with data.

Here are a few examples:

Accounts receivable balance
Cash balance
Profit margin by service
Profit margin by project
Actual sales vs. projection
Projected net income
Break-even point

Key numbers are as unique to a business as the owner.  The numbers that are vital to your success may not be the same as your competitor. The key is to learn the numbers that are important to you and your business, start tracking them, measure your progress, and make changes as necessary.  It takes a little work, but it is well worth it. I promise!

How Panoramic can help you.

Through my blog, webinars and YouTube channel, you’ll be provided tips, tricks, and strategies to identify and track the numbers that are vital to your business.

Whether you are an experienced entrepreneur or just getting started, you’ll discover valuable insights that will put more money in your pocket.

A quick solution would be to purchase a Back Pocket CFO Session. I’ll review your financial statements and prepare a customized one-page summary of your key numbers, trends and recommendations.

Not sure where to start? No problem. The Stuck to Unstoppable Strategy Session was created for you. We’ll talk about what’s on your mind.  You’ll get quick answers to your burning questions and shorten your learning curve.

I want you to be successful, so contact me if you don’t find a solution to your problem. Panoramic is available to help you mark the accounting stuff off your to-do list, so you can get back to your business.

So what are you waiting for? Sign up for the Get Started information package.

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