Knowing your accounting numbers like revenue, profit and expense numbers are important… and I’m guessing that you look at those pretty often.
Or, maybe you use your bank balance as a guide - and that's a good number to know also.
But, there is another set of numbers that give A TON more insight into how your everyday activities are impacting your bottom line.
When I start to work with a new studio owner, one of the first questions I ask them is whether they track their key numbers (otherwise known as KPI’s).
Because when you use real data to determine the health of your business, you stop relying on a “feeling” and you can become more confident that you are making the right decisions in your business.
These metrics also enable you to evaluate changes you’ve made, or determine whether your new promotion is a success.
If you want to know how your business is REALLY doing – there are numbers that will help you understand whats going on under the hood
Your key performance indicators or business metrics are a set of reports or numbers that you track to measure and analyze the health and performance of your business.
Usually, these are outside of traditional accounting numbers. This set of numbers help to give a more accurate picture of how your business is doing – what is working and what isn’t.
As a business owner - if you are not tracking these numbers then there could be a BIG opportunity to close the gap between where you are now and where you want to be
Here are a few key numbers you could use to help determine the health of your business:
Attendance - total paid visits, total unique clients, average visits per week
Sales by service
New client visits
Marketing metrics - referrals
These numbers gives you the data you need to learn, discover and understand. And really make sure you are focusing on what makes a difference.
Tracking what is important in YOUR business and what you are focused on achieving is key. So if you are a new business, then getting new clients is your top priority, and that is exactly what you should be tracking.
As a mature business, you may want to focus more on attendance or improving retention.
With consistent tracking of key metrics you get insight for what is getting better and what is not.
WHAT YOU MEASURE YOU WILL IMPROVE
Interestingly it’s not necessarily JUST about the numbers that your reports show you! It's also about awareness.
The act of bringing your goals into your current consciousness alone, will help you become make progress.
Counting, measuring and tracking is the system that enables success. It creates a commitment to show up and become aware of your goals each week or month.
Seeing the trends is super interesting too. It gives you the ability to manage seasonality and plan for busy (and not so busy) times.
Here are my Top Tips:
- Choose 3-5 metrics that you feel comfortable with and can easily measure monthly/weekly
- Review the data you have collected periodically (e.g. quarterly) and analyze what is working and what isn’t
- It can be really helpful to put the data into a visual format (vs looking at a page of numbers). Use bar charts and pie charts to do this.
- Change or adapt your promotions, marketing, schedules etc according to what you discover... then track that too!
- Look for the patterns and be aware of seasonality, local or national trends and most importantly how your numbers are associated with what you are doing within your business
p.s. If you need some help looking at your numbers and understanding what they are telling you, why not book a session to go through them together. I LOVE numbers and helping you to figure out what you can do to grow them :)