Okay, you're going out to the car to take a drive. What do you do?
If you are taking a quick trip to the store down the street, you likely just jump in the car and take off without much thought.
If you are taking a trip to the other side of town, you may check the gas gauge and make sure you have enough fuel to make the round rip. After that, you start the car and take off.
What happens when you take a trip across country?
You are going to be spending days on the road and spending a lot of money on gas. To make sure you are using your time and money efficiently, you will do a bit of planning before leaving. You will know the approximate route you will take. You will take the most fuel-efficient vehicle with you to keep fuel costs down. Once you do that kind of planning, you are ready to go.
What if you spent every day on the road for months at a time?
Measuring distances and fuel usage would become all important. In fact, you would be tracking those figures every day. You would be looking for ways to cut your distance driven and your fuel use. Or in other words you are looking for ways to manage your resources more efficiently.
Making Your Business Better by Measuring
The same thinking needs to go into your business and its numbers. You are in business every day, all day. You need to use your time and resources as wisely as possible. You do that by knowing what your resources are, what the numbers are saying about them, and how to use them more efficiently. If you ignore those numbers, you are ignoring a basic business growth strategy.
You cannot improve something unless you are measuring it. Otherwise, how do you know if you are improving things or actually making them worse?
Going back to the driving analogy, if you don't know how many miles you have driven and how many gallons of fuel you have used, you cannot measure how many miles you are getting out of a tank of gas. You cannot measure whether driving another route or using another vehicle will give you better fuel efficiency.
In business you need to measure everything. This gives you a baseline to compare with when you make changes. You can start testing changes and see which ones improve your numbers. This is a basic business growth strategy.
An obvious area to apply this kind of thinking is marketing. For example, you need to know how many customers you have and how many leads you have. When you start a new marketing campaign, you can take new measurements and gauge the impact the campaign had on your customer and lead counts.
The need to measure extends beyond marketing. You need to apply it to every aspect of your business. If you run a sandwich shop, for example, how long does it take for a customer to place an order, get it made, and pay for it? Once you have that number, you can start thinking about ways to improve it. Making things more efficient behind the counter may shorten the wait time of the customer. Changing the shop layout can help. You should also measure the amount of ingredients go into each sandwich, and the cost of those ingredients, then you know how much each sandwich costs you to make, and you know how much more it will cost if your team adds a little extra! Just think, if they add one additional slice of cheese to every sandwich and you sell 1,000 of those sandwiches a day, that’s 312,000 extra slices a year! Even at 2 cents a slice, that more than $6,000 a year in extra expenses!
Start Taking Measurements and Making Changes
As you can see, measuring everything is the first step to making changes to your business. This is an often-overlooked business growth strategy. You need to make it a priority. To Learn more about creating a business that can work without you check out our Six Steps to a Better Business.
Now, what are you going to start measuring today?