In business, counting isn't just a mechanical act; it's a fundamental cornerstone of management.
Why? Because what you can measure, you can manage. Here we look at business numbers including:
How to understand the data
The story in your profit and loss
Counting what matters
Understanding your business numbers
When starting out, it's easy to overlook the importance of numbers, especially when managing seems to focus heavily on conversations and motivating people.
But there's a far more straightforward path to managing both people and your business more effectively: understanding your numbers.
Numbers tell a story
Numbers, whether they appear on a profit and loss statement or a balance sheet, tell a story. They reveal insights and guide decisions.
Many business advisors frequently emphasise the need for their clients to delve deeper into their business figures, not just superficially glance at them.
But understanding isn't merely about mapping out where numbers fall on a page. It's about interpreting these numbers to know precisely what they depict about your business health.
The Story in Your Profit and Loss Statement
Take, for instance, your profit and loss statement. It's not just a list of financial items; it's a narrative of your business's performance.
At times, the figures at the bottom might be daunting, but these are the stories numbers tell—the highs and the lows. Grasping the full implications of these numbers prepares you to enhance your results and steer your business towards growth.
Good Numbers and Bad Numbers
The good numbers and the bad ones, while numerically different, are grounded in the same principles.
Poor figures often lead to unsatisfactory outcomes, while robust figures breed successful results. It’s an elemental concept: understand what counts and focus your energies on measuring and managing those aspects.
Counting What Matters
Often in business, things are counted simply because they can be, not because they bring any real value.
It's crucial to distinguish what genuinely influences results and concentrate on those metrics. Once you identify these influential factors, effective management follows.
A typical business challenge
Let’s streamline this with a simple example: acquiring customers.
A typical business challenge involves speaking to a certain number of prospects to convert one into a customer. Regardless of skill level, this ratio holds universally true.
Knowing this, you can review your performance in reaching customers. For example, if you need to talk to 10 people to secure one customer, then for three customers, you need 30 interactions. It's arithmetic but enlightening.
Time becomes a critical factor here, too. If speaking to 10 people takes a week, obtaining three customers necessitates three weeks of hard work.
If your goal is three customers within a single week, strategies must adapt. You could either refine your approach to reduce the number of prospects needed for each conversion or enlist additional help to meet your targets.
This straightforward analysis of numbers isn't just about adjustments in strategy. It's about unleashing the potential within your business.
By understanding your numbers, you unlock pathways for growth, efficiency, and superior outcomes.
As you engage with these figures, you'll find your performance improving, your business expanding, and your capabilities sharpening. Even your behaviours might adapt, prioritising what yields the best results.
The quest for better outcomes
At the heart of business improvement is the quest for better outcomes. By consistently measuring and managing your activities, you cultivate an environment for success.
Numbers deliver a unique advantage. They offer an objective lens through which to assess and adjust operations. Unlike human feedback, which might be tempered with personal biases, numbers present clear-cut facts.
An objective analysis leads to actionable insights and, thus, significant growth can emerge from minor changes implemented at the earliest stages.
Counting is a necessity and strategy
Being conscious of numbers isn’t simply a business necessity; it's a strategy for progress and prosperity. So, if you aim to elevate your business, start with counting. Understand what your numbers say, and let that guide your journey to success.
Unbelievably small changes can lead to tremendous results when measured and managed effectively, showcasing the profound power hidden within the simplicity of counting.
Highlights
00:00 The Importance of Counting in Business
01:10 Understanding Your Numbers
02:49 Counting What Matters
03:28 Practical Examples of Counting
06:08 Improving Business Through Numbers
06:56 The Objectivity of Numbers
Resources Mentioned in the Podcast
Business Wisdom: Strategies For Success https://www.enevergroup.com.au/product/business-wisdom-strategies-for-success/
Business Growth Through Scalable, Repeatable Success https://www.enevergroup.com.au/product/business-growth-through-scalable-repeatable-success/
The Numbers You Need To Know In Sales https://www.enevergroup.com.au/the-numbers-you-need-to-know-in-sales-to-attract-the-revenue-you-need/
What And When To Measure In Business https://www.enevergroup.com.au/measured-approach-measure-business/