Do you know your numbers?
Before we go into it, let me vent a bit:)
I’m flabbergasted by how many people run their businesses with a ‘fly by the seat of their pants’ attitude.
When I ask a business owner/ entrepreneur, how is your business going? Are you on track to meet your goals?
They look at me like a deer in a head light!
It turns out, they have no idea what they are doing. It isn’t until they are doing their taxes, that they realize they had very few sales and that their expenses exceed their profits. They sit back in a slump and say, how did this happen!?!
So, let me ask you, do you know your numbers and I don’t mean your multiplication tables.
I mean your business numbers.
And how would you know your numbers?
One way is by monitoring your KPIs and IPAs.
You see, business is not just about revenue in and expenses out. It is more than that.
So, let’s understand what a KPI is first.
It is a Key Performance Indicator of your business. A KPI is a performance measurement that helps you understand how your business is actually performing. It tells you if your actions are being successful or not.
So a KPI is actionable, quantifiable, attainable and updatable. It does not have to stay stagnant but can evolve as your business evolves.
So in my network marketing business, my coaching business and my real estate investing business, I have numerous KPIs, that I monitor on a scheduled basis.
So for example, I track these key performance indicators weekly:
- personal sales/ year to date
- team sales/ year to date
- new customer orders/ year to date
- recurring customer orders/ year to date
- new affiliates and team members/ year to date
- weekly commission/ year to date
I also have quarterly goals and track how I am performing against those goals, so that I can visually see where I’m going quarterly, semi-annually and annually.
Measuring the metrics is what leads to improvement and success.
In my realestate investing business, I monitor my business monthly because the rent, mortgage, taxes, banking, maintenance, etc. operate that way. So this is different from my main business I mentioned above.
In my business coaching business, I monitor my KPIs on a monthly basis as well. This includes tracking of analytics of my website and social media to see where my business is coming from.
Now that you have established your KPIs – determine how often you need to track and review. Some will be weekly, some will be monthly, some will be quarterly, some semi-annually and some annually, depending on the type of business you have.
It’s about determining what’s working and what’s not working.
The second thing you need to do is identify your Income Producing Activities or IPAs. Not beer but activity!
We can all do a lot of activities in a day, but unfortunately they are not all income producing. So what are your income producing activities?
In my business, it is very important that I set appointments every day with prospects to educate them on my business and products.
So two IPAs would be scheduling daily appointments and enrolling new customers each week. Tracking these two IPAs would give me insight on a couple of things – customer conversion rate and new income generated.
From this information I would know if my conversion rate was satisfactory or that I needed to improve it.
Peter Drucker says, “if you can’t measure it, you can’t improve it.”
Other daily IPAs for you may be:
- Reaching out to people in your network who know, like and trust you
- Reaching out to new possible prospects using social media – Facebook, Instagram, etc
- Following up with existing customers and previously approached prospect
- Placing ads using various means including social media
- Conducting webinars, facebook live, etc
- Attending networking events
All of these can lead to new customer acquisition and new business partners and sales. So they are all income producing activities, but which ones are actually leading to new customers or business partners?
Do you know your numbers? You need to know.
So you need to track what income each activity is creating for you. These are your metrics that will make or break your business success.
By knowing your KPIs and IPAs and assessing them regularly, I guarantee that you will know your numbers!
Tracking numbers is a passion of mine, from the time I worked in retail management, owning my own store and then as a trainer for a world renowned cosmetic company.
And now, I work as a freedom based entrepreneur and love to measure the numbers. They tell us what we need to know and how to modify and adjust what we’re doing.
So feel free to reach out, so we can talk more about numbers and how I can help you and your business!
My email is firstname.lastname@example.org
When performance is measured and reported, the rate of improvement accelerates. – Thomas Monson, Author