You can’t manage what you don’t measure, or so the saying goes. And the corollary is you can’t manage anything if you’re measuring everything. So what’s the balance? What metrics should you be considering on a daily, weekly, monthly, quarterly and yearly basis in order to most effectively and efficiently manage YOUR business?
In addition to monitoring the usual suspects like revenue and revenue growth, cash flow and margins, you should also be looking at customer service, sales, operations and employee performance indicators. Profitability by customer, location, product, channel, etc. is all also very important in understanding where your business is succeeding and struggling. And beyond these standard metrics, every business has unique characteristics that need to be measured and managed.
The excellent book “Moneyball” illustrates how relying on traditional and outdated metrics can be detrimental to your success, especially if you’re competing against larger and better-funded opponents. In Major League baseball it turned out that on-base and slugging percentage was much more important than batting average, home runs, and RBIs. Billy Beane was able to use this and similar insights to assemble a team that competed against the best teams in the league at a fraction of the price.
So what are key metrics that you should focus on that will allow your business to compete against any competitor, big or small? What are the overlooked and undermanaged metrics in your business/industry?
FLX Business Services can help you develop a metrics dashboard that will give you deeper visibility into your business and help form strategy to take your business to the next level. When combined with our bookkeeping services, you will always know how your business is performing and be able to anticipate issues before they become big problems.
Click HERE to book a free consultation.
And click HERE for an article that might help you get creative about possible metrics for your business.
“To succeed, organizations need to do what
Beane did: jettison the conventional “wisdom”
and introduce the right metrics”