Question 10: How well are you measuring and controlling the business drivers ( key business indicators) out of 10

Every business has key measures on how the business is going. If you are really in control of your business you need to know what the key measures should be for your business and to be monitoring and measuring those on a frequent regular basis.

I have a number of clients ( especially therapists) who say that they HATE numbers and have the equivalent of dyslexia with numbers. In this case we jointly devise a system based against the goals that they have set for themselves that will tell them whether they are on track or not. This can be done using a “traffic light” system ( red is a warning, orange is caution and green is good or on track). So if a therapist needs three new leads a day each day starts with red and as a new lead is followed up the indicator goes from red to orange to green.

it is easiest if you are visual to have results in a visual form, either graphs or tables. It is doing something that works for you so you know what is going on in your business at all times. Im sure when you are flying off on holiday you would like the pilots to be checking how high they are flying, to miss any obstacles, masts etc; to know where they are coming from and where they are going and whether they are where they expect to be at this time and if they have sufficient fuel to get to their destination.

So you certainly need to be aware of what drives your business.

If you are in a people business you will need to focus on staffing issues: do you know your staff turnover, absenteeism, sales/ profit per employee, satisfaction rating?

For service industries you need to focus on customer satisfaction: do you know the percentage of your customers that rate your service as good or excellent, satisfactory or poor? How is this changing over time? What percentage of complaints do you receive/ returns do you get?

For production businesses you need to focus on productivity: do you know your percentage of quality production and rejects? Your productivity per man or machine hour and the percentage of on-time delivery?

If you have stock you need to concentrate on how much money you have tied up in stock: do you know how many days stock you have? How much risk there is of non delivery if you shorten time, percentage of fast moving stock to slow moving stock?

And every business needs to focus on sales, market position and cash-flow. These are so important that we will explore them further in later weeks.

In the meantime, what are you doing to ensure you have the key information you need to run your business in a timely manner and a format that makes it easy for you to understand?

I do have a couple of entrepreneur clients who state that they don’t need all this because it is in their head and they have a sense of where it is at. That’s great but what happens when they go on holiday or are off sick? Of course the answer could be to never take holidays or go sick but can you guarantee that you will never take a days sickness again until you retire?

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