7 Things To Keep Track Of To Keep Your Business Growing

There’s a ton of stuff to keep track of when you’re trying to grow a business. Inputs, outputs, customers, time, investment, impact and the list goes on and on. How do you know what’s important to track and what’s not? What’s the difference between vanity metrics and the metrics that represent real dollars in your bank account? 

I have some tips to help you out and they all revolve around supporting the strategy your building for your business already. 

Having your strategy (essentially your why, what and how) together will help you manage and measure the effort you’re throwing into your business. There’s a catch though, business strategy, the instructions that you're constantly building and adjusting for your business comes in lots of flavors and sizes. 

On top of that there’s no single best approach that is always applicable for every situation and no single tool that fixes every problem or overcomes every challenge in your business. Which ultimately leads me to one of my BIGGEST pet peeves, when I hear “consultants” talk about a single process they run everyone through. 

Literally makes my skin crawl. 

I am a big fan of having a strategic toolbox to sift through to help the business owners I work with find resources that makes sense to them and create change that matters. It works because just like in real life when you have a specific problem with your car or house you (or someone you pay) reaches into a real tool box and pulls out the right tool for the job. In this post I’m going to outline some important metrics you should be keeping track of, these help you identify specific problems or opportunities. That way when you reach into your strategic tool box you have the right information to pick the right tool for your business growing job.

Why should you care?! 

The challenge for you as a busy business owner is to choose the right approach or tool to help you manage your business. Maybe you’re looking to create overarching guidelines in your business or you need to decide how you’re going to sell you to a particular customer. Maybe you’re somewhere in between the 30,000 foot view of your business and boots-on-the-floor action. At each one of those stages there might be a different tool to help you navigate the buffet of possible decisions you could make and track all the outcomes that are possible.

How do you know which one is for you at any given moment? 

You know based on the data you’re using. If you’re a savvy entrepreneur type you might better know the meat and potatoes of your business as metrics. If you don’t identify as with the sexy way entrepreneurs are portrayed in the media that’s ok too - this is also for you. 

Better data (or metrics) means that you can better scan through all your options and pick the advice and resources that will be the most helpful. Better data and metrics will also save you and your business lots of time and frustration if you’re working with any type of would-be “consultant” that might be trying to funnel you through some predetermined evidence-based system. 

PRO -TIP: Most peer reviewed, well documented and established strategic frameworks are evidence-based. 

Here are a list of 7 metrics you should be keeping track of in your business. These are not the only 7 you should be keeping track but it’s a good start if you’ve just been winging it for a while. It’s in identifying challenges or opportunities in any/some of these that should guide how you find solutions or resources to get the most out of the time and energy you’re putting into your business. 

I need to throw out this disclaimer before we get into these - If you’re not tracking these in any kind of real and quantifiable way (some might be a little fuzzy I know) then you will not get any value out of this! 

1. Gross Revenue 

This is the money that’s coming into your business. Tracking gross revenue weekly or monthly can help you keep track of how the return on your efforts as you’re out in the world making people’s lives better. It can also help you identify patterns in your customer's behavior, especially if there is some kind of seasonality to your business. 

2. Leads and Referrals

This one can be applied to you retail folk but it’s better suited for any kind of service business. Tracking your leads and referrals every week or month can be really helpful in identifying where your business is coming from. I am a big fan of doing the most important work and putting your most attentive energy into the places you know yield great results for you. I know resources are finite and I know you know what it feels like to have lots of lines in the water with nothing biting. Keeping track of where your leads and referrals are coming from will help you avoid sales and marketing burnout and find the resources to help you better leverage the places you know your best business comes from. 

3. Profit Per Customer/Sale

It blows my mind when I ask people what their profitability looks like per customer or sale and they stare blankly at me. Don’t be a blank-stare’er. You need to know how much profit you’re getting from each client or sale for so many reasons. A few of which include how you’re pricing your goodies, how much time or energy each transaction demands of you and how scalable your business is. If every time someone pays you for something you are winging it how can you expect to get better and build a sustainable business that will support the lifestyle you want? 

4. Cash or Operating Reserves

If you're small you might not have much cash but your biggest asset could be time. You still want to manage time just as you would any cash in your business. How are you spending your resources? Are you weighing any opportunity costs? Have a list of priorities in terms of what gets your attention or cash when you’re working? It’s ok if you don’t have answers to all of those questions right now. What’s not ok is not tracking where those resources are going and what the returns or outcomes are on any of those investments. Keep track of your cash it will help you manage any kind of seasonality you happen to uncover while you’re keeping an eye on your gross revenue. See what I did there? It’s all connected! 

5. Inventory or Client Turnover/Lifecycle 

This is a fun one. How long do your goodies usually stay on your shelves before they sell? If you sell anything every extra day something sits represents cash your business doesn’t have and the growing possibility that it might not sell/expire. You might not ever be as tight an inventory management ship as Wal-Mart but buying appropriately will help you from sinking cash into too much inventory. For my service kin out there the equivalent measure is capacity. How many people can you serve in any given day, week, or month? If you are charging a fixed fee for service you want to make sure you are doing the best job you can and moving those clients through your service pipeline so that you can free up space to take on new clients. The longer it takes you to deliver the longer it will be before your next paying customer steps up and engages with you. 

6. Market Share and Brand Equity 

These metrics can be a little fuzzy for some business owners. The goal here is for you to keep an eye on where your business is in relation to your competitors in your industry. If you can get census data or some kind of industry specific insight on where you place that’s great. It’s also ok if you can’t but, if you’re fighting to get people to walk through your doors (physical or digital) and spend money then you should evaluate your competitive landscape every once and awhile.  Don’t think you have competitors? I’m willing to call you out and challenge you. I challenge you to think about any feasible substitute someone might be able to spend their discretionary dollars on and achieve some kind of similar outcome, feeling or experience. 

7. Time To Market

How long does it take for something to go from being an idea in your brain to an actual saleable thing. Keeping an eye on Time To Market will give you an idea of efficient your operational processes are. If you’re like me then you probably have lots of projects that you get really excited about, start and then never finish. Measuring Time To Market will help you keep yourself from investing too much into projects like this and to help keep you focused on the things that matter in your business. Those are things like serving your existing customers and doing the work that gets you recognized in your market. 

Just because your business is small, or smaller than your competitors, that does not mean that you can overlook being analytical. Every week or month you should be sitting down, getting elbow deep in the data of your business and looking for trends. It’s in how the data of your business changes over time that you will be able to identify REAL opportunities and challenges.

It’s through your data that you can make decisions, take actions and actually track your outcomes. You’ll also be able to look for the right tools or resources to help you make the decisions you need to make to push your business forward. No generic or blanket approaches to address your business’ specific needs. Keeping track of metrics in your business also keeps you from just feeling helplessly stuck or worse throwing money at anyone that sounds like they might have a good idea on getting your business unstuck. 

How To Make Better Choices

**Steps on to soapbox.**

I’m getting a little tired of the entrepreneurs and the would-be business coaches/consultants that are minimizing the importance of strategy. I keep bumping into claims that business plans and strategic plans are a waste of time. A waste of time? Why are entrepreneurs just sprinting to a MVP? Is it because iterating makes you feel like your business is doing something?

I’m all for minimum viable products but that doesn’t mean your work shouldn’t be thoughtful, deliberate, and value-creating. Lately objections to competitive strategy I’ve been getting are when someone from this camp claims that their lean strategic approach is the only way to deal with the volatility/uncertainty/complexity/ambiguity of today’s marketplace. (That’s the VUCA acronym for all my strat-nerds out there.) I believe, not always but most of the time, entrepreneurs are using this kind of strategy argument as a cop-out.

What?!

I get it. It’s fun to tinker. Strategic thinking takes time, research, and is a little unsexy sometimes. Not to mention the need to be consistent and systematic with how your firm makes decisions. I’m 100% for “failing fast and failing often” but I guess I would add “failing deliberately” to those first two fail prefixes. Why “failing deliberately”? Because it means you tested something specifically, collected some data, and made a choice. Here are four steps, concentric circles, or tips about how you should frame strategy.

Strategy at its core is about making choices. Planning is great but it’s the actions that are taken after everyone agrees on the plan that really matters. There’s a very real breakdown that happens when you come up with the plan and then never do the work to realize the goals or <insert success metric>. There’s also a lot of power in choosing what not to do. Channel your inner economics student/professor and try to remember all those talks about opportunity costs. It’s real and it’s a thing.

When you take a step back from the core it’s about understanding how your business is positioned in its market. This is where your business’ malleability and your market’s predictability get pulled in. How quickly can you continue to align yourself with the tastes and expectations of your target market? Do you even know who your target market is and why they should engage with you? How are your competitors reacting to the choices you’re making? Are you really getting the most out of your supply chain? Immediate follow-up answer: Yes, every business (even solo-service-providing-consultant-freelancers) has a supply chain.

Another step back from that should be around how you are communicating with your stakeholders. Anyone that is engaging with you or that you want to be engaging with is a stakeholder. Why should they listen to you? Why should they care? Your strategies success hinges on your ability to tell a story that matters. It’s that story that will drive your actions, the actions of your employees and even the actions of your customers. You need to be able to communicate in a way that makes them feel like their roles matter. Engaging with you matters. Buying your product or service matters (and also provides lots and lots of value).

The last step back has to do with planning. Planning is part of strategy. Planning is NOT strategy. Planning also isn’t perfect. It’s hard to predict the future, it’s a volatile world out there. It’s important that you think of planning as a way of surveying a landscape. It’s a way of taking stock of what you have, all the “stuff” that makes your business work. You’re looking at things like capabilities, talent, money, time, social media celebrity status and trying to organize them in a way that will get your business to achieving it’s goals in terms of mission and profitability. What comes from planning is a framework for making choices and a way to evaluate those choices as you go.

Strategy is an interesting mix of science and art. It’s also hard and scary sometimes. A good strategy will push us to be a little uncomfortable and as Malcolm Gladwell says a little disagreeable. That’s where strategy differs from planning - the act of doing something! Making choices systematically can be tough and not always what you think running a business should feel like. I’ll end borrowing from Roger Martin encouraging you to make deliberate decisions around deciding where to play and how to win as you’re trying to get the most out of strategy.

**Steps off soapbox.**

If you're still stuck or wondering how you can start to make better choices in practice right now you can download a FREE resource I made for just this occasion. It's called the Disruptive Decision Framework and all you have to do is sign up and I will hand deliver a copy to your inbox. 

Why You Should Care About The Market And Strategic Aspirations

The market decides what it wants. It decides how good you are and at what price consumers/clients/buyers are willing to pay for you. That means you need to get really clear and articulate about the value you’re bringing to the market. Big fluffy mission statements that try to reach everyone are just an exercise for boards and executive teams that makes them feel good about themselves that day.

No joke, a mission statement doesn’t cut it any more. Having your vision statement or your core beliefs taped up in a common space or over your computer monitor will only marginally motivate you and your stakeholders. In order to get the commitment and the engagement from yourself and your customers or audience, you need to be able to deliver value and communicate that value in a universally understood language. In other words you have to let your value show everyone in the market that you are worth paying attention to. Once you get clear about that it’s at the crossroads of value and meaningful communication where you will find strategic aspirations.

There has been a lot of buzz around the word “aspiration” lately. I hear it in the business audiobooks I listen too, the blogs I read and all over the Harvard Business Review site. Large businesses use aspirations to paint a picture of what the world will look like in the future when every consumer utilizes their product or service. If you’re struggling for an example to visualize, I will happily oblige by offering you the imagery of the “Buy ‘n’ Large” mega-corporation from Disney’s Wall-E. Talk about the future of consumerism... But what does it mean to the independent entrepreneur who is out there everyday hustling to find success?

You aren’t “Buy ‘n’ Large” and this isn’t a Disney Movie.

Your strategic aspiration is your conceptualized view of what success looks like. It’s the scenario you play in your head of what your business looks like when it’s firing on all cylinders. That means you delivering your most valuable work to the people or businesses that need it most. That also means that you have to work everyday at clarifying what your aspirations are - especially because they can change and that’s ok!

Strategic aspirations are not daydreaming and well wishing. They are not empty intentions. Your aspirations are the foundations of the strategic choices you make going forward and will guide your allocation of resources. As an entrepreneur you are constantly making choices and are constantly battling resource constraints. Often your aspirations will help you make the best possible choices by default (with a little practice that is). Getting crystal clear in your aspirations will help you evaluate your choice outcomes and navigate them in a way that produces outcomes that will move you closer to realizing your aspirations.

The neat thing about strategic aspirations is that you don’t need a gimmick to remember them. Because you put in the work to figure out what success looks like, feels like, and even smells like your aspirations should be resonating with you to your core.

As an entrepreneur or a professional with entrepreneurial tendencies, life is a constant balancing act. Aspirations provide the framework for how your business will behave and a systematic way of checking in with yourself. At this point if you like your taped document or stick notes above your computer you can put them back up. Only if you are really clear about what success looks like. When you do the work and get to the core of clearly identifying success for your business you can start to deconstruct it into steps you can take daily to get there.

After I get clear on my aspirations what happens?

I have a very simplified set of tips or tactics that you can implement right now. Not overly complicated and not overly difficult.

Decide What Matters: Figure out how you are going to measure success. Here, the fewer the metrics the better.
Everyday Action: Figure out what you have to do daily to get you to your aspirations.

Week/Monthly Action: Work in time to evaluate how your weeks/months are going based on what you’ve done and what you decided matters.

Quarterly/Annually Action: These are the things that have to happen for your business to grow as you want it. Your individual daily actions might not necessarily provide the direct outcomes needed to get here but they should be building to these goals or plan.

That’s it. The hardest part is not the planning, especially because that can change. The hardest part is deciding what’s important and then doing the WORK! So figure out what you can do daily to help push your aspirations forward and take some kind of action today!

What Powerlifting Can Teach You About Your Business

This was my first meet and my deadlift opener. 

“Everybody wants to be a bodybuilder, but nobody wants to lift no heavy-ass weights.”

- Ronnie Coleman

That is one of my all time favorite sayings. Except, in my case substitute “bodybuilding” for “powerlifting”. The message still stands though - you can’t do either unless you commit to moving some “heavy-ass weights”.

I love this adage because it applies to business development and business strategy as well. And, it does it on a few levels. Let’s break four of them down.

1. Like any exercise regime (powerlifting included), building good strategy takes an investment of patience and dedication before you start to notice the results. In most cases, strategy is not something you decide on today and see the outcomes, benefits or data tomorrow. It takes time. Time for information and processes to disseminate through your organization and to take hold. When you’re building strength and strategy you have to put the time into actually doing the work to get to some kind of outcome. Not just thinking about/planning for all your future success. You can’t get your body or your business stronger if you aren’t putting in the work.

2. Realistic goals are important. When you’re powerlifting your body and gravity are absolutely brutal judges. When you’re setting goals around how much weight you’re going to move you have to do so within some (albeit temporary) constraints. Where am I today and realistically how much can I expect to improve before my next competition or meet? Works for business strategy too!

For the most part, as an entrepreneur you aren’t going to just wake up one day and decide that being a seven-figure business is attainable in the next 6 weeks. Especially, if you’re looking at your financials and you’re only a three-figure business today with no real growth opportunities jumping out at you. I’m not saying it’s impossible or never going to happen but in the short term it is probabilistically unlikely. So, get pragmatic. What are your current business constraints? How can you start to move the needle today to build some winning momentum that will eventually carry you towards being the World's Strongest Business.

3. Use the feedback you’re getting from your body and your business in real time. When I’m training my body it is constantly giving me real time feedback about what I’m doing. Tight shoulders? Put the weight down and stretch. Too heavy? Have someone help me get the weight off my chest and take it down a pound or two. Your business (any business) is often doing the same thing. Every decision you make in your business will provide you with feedback. It’s up to you to figure out what that feedback is telling you and make adjustments so that your next actions support the goals you set for yourself. The worst thing you can do while you’re training your body and running your business is ignore the feedback. It will eventually lead to some kind of breakdown or negative outcome that will cost you time, money and energy to come back from - if you can come back from it at all.

4. What you feed your body and your business matters. Talking about diets and business strategy is not a stretch I promise - just stay with me. It’s no secret that when you feed your body good things, like healthy food and appropriate sleep, you are setting the stage to get the best possible performance out of your body. The same goes for your business. When you are thinking about business strategy we swap out food for inputs. Inputs like time, money, workflow, sales prospects/opportunities, etc. These are examples of the things your business needs to perform optimally. It doesn’t matter how good your strategy is, if you aren’t feeding your business appropriately you won’t be able to get the most out of it. There is also a resource management function piece to this. It’s about equipping yourself, and your teams, as best you can so that they can have the opportunity to do the best work and deliver as much value as possible.

There has to be a balance of inputs. Just like in your body, there’s only so much protein your body can absorb in any one sitting. Eventually, the marginal benefit from eating one more ounce of chicken goes to zero. In your business keeping tabs on the marginal benefits of the inputs you’re providing it is just as important - you don’t want to waste any of the already scarce resources your investing if you can help it.

I have to cap this at four points because I think I can literally keep making this analogy for another 1500 words. Hopefully you’re seeing a pattern here. That pattern is that running your business or building good strategy isn’t all that different from taking care of your body. If you take the time to think about how you are measuring your physical health you can translate that into how to better take care of your business’ health. You don’t even need an MBA for that!

It boils down to a little bit of discipline, an eye for identifying what’s important and the commitment to follow through. Too many people and their businesses go the way of fad (crash) diets. The try really hard for a little while, see some results and then get lazy. What happens? They yo-yo back to unhealthy and look for the next secret to get them the quick results they think they need. Don’t be that person! If you are committing to healthier lifestyle, commit your business’ strategy and success in the same way.

Making better business decisions takes practice and discipline. If you need some help I have a free resource for you. It’s the Disruptive Decision Framework. Think of it as the workout plan for the decisions you have to make in your business. It will help keep you accountable and it’s free!