Do you use the main performance metrics to run your business? One of the truismes that I trust with all my heart is that there are no good business owners in every aspect of having and operating a business.
In order to be a little clearer, skills to have and operate many businesses and vary. What tends to attract business owners to operate their own business is an independent belief that they can do one or two aspects of running a business very well and both hire the skills they have or learn this with time.
I also firmly believe that too many business owners don’t quite understand how their businesses appear and more importantly, what they can do to make this task easier for them.
Legally, every year the business must submit a tax refund to the IRS to express how business is done. Most business owners outsourcing this task to a professional like CPA or registered agents. Some choose to make and submit their own tax return which is fine as long as it is done correctly; Especially if at some point they want to sell business. It is almost impossible to sell business if tax returns are inaccurate because banks will not consider loans to businesses to buyers / borrowers and buyers will not risk buying business if they are uncomfortable with the quality of business tax returns.
However, what is important, what I see many business owners is missing, is that business financial data provides a gold mining information. Tucked into profit or loss or income statement is important information about gross sales, gross profit, net income or tax profit before tax and tax to pay the government to achieve net income. However, this document often has other documents that collect and manage data rolling into profit and loss and this is where the gold mine exists.
With a little time and early effort, business owners can have their book goalkeeper to isolate what I call the main performance metrics or KPM and have been provided weekly or monthly to allow business owners to find out the direction of business traveling and what, if any, adjustments that need them for. KPM will vary with every business and generally fall into a certain bucket. Some examples include the total number of calls, the total number of calls to make an order, the total number of calls to cancel the order.
KPM varies with every business but they only express themselves by looking for them and then pay attention to them. There is a great expression – if you can’t measure it, you can’t manage it.
And that’s my challenge for you. What is your KPM? You don’t have time to collect this data? If you don’t have time then delegate to someone you believe and just as important, set aside a certain date and time every week or month to discuss it. The numbers don’t lie and will tell you more about your business in the fastest time to give your greatest return on time to manage and run your business.
Andrew is a business owner of 5 times that helps entrepreneurs out or enter business ownership. The service includes helping owners sell and / or buyers to buy existing businesses or consult about buying franchises. He also provides machine assessment and certified equipment and business assessment.