It’s a large part of my job to work with Chicago business owners by “picking up the pieces” of their finances, and, unfortunately, it’s often too late to have done any good.
And of course, we work with plenty of thriving businesses in Chicago by helping them spot hidden opportunities buried within a mess of data.
That’s because every day, my staff and I swim in an ocean of numbers. And we’ve become pretty quick about knowing what’s happening in a business by seeing where the “currents” are leading (if you will).
But often we’re stuck looking historically instead of real-time, because too many business owners don’t have a system in place for getting those numbers to us quickly. But when they do, we can very quickly know how to help.
So today I’d like to help identify for you some numbers that don’t necessarily show up on balance sheets, and why they’re perhaps even more important than what you see on a P/L statement …
Key Marketing And Sales Metrics Your Chicago Business Should Track
“Reality is that which, when you stop believing in it, doesn’t go away.” -Philip K. Dick
It’s easy to get lazy when a business can pick the low hanging fruit available in an easy marketplace.
But, that’s not always the case, is it?
Markets shrink, funding dries up, prospects aren’t as easily found, or profitability margins decrease. So what do you do? Many business owners we’ve met in Chicago don’t know how to tweak their marketing and sales systems so they can track the numbers at each step in the sales process, and grow in new directions.
I have seen (in several industries) that the businesses who have weekly sales meetings, who track their numbers and hold team members accountable are successful … while those that guess and “assume” are usually out of business. It’s just a matter of time.
The key is knowing the numbers — what is the average expected result and how you are measuring up against that result for each step in the process.
But many people don’t want to track the numbers, because they might have to admit that they aren’t doing their job and letting their teammates down, others simply do not have the systems or understand how to track those numbers or understand the benchmarks of the average business, the good business — and the great business.
Many self-employed business owners just feel what they are doing is “working” without having tested it or tracking where they are at. Sadly, this reflects a naivete that will eventually bite you in the rear-end.
Unless you have completed valid measurements and received statistically reliable results, you don’t have any idea whether you are improving or going backwards.
Even with a growing economy, it’s important to get ahead of the curve and not rely on lazy systems for your business.
So, here is the cold, hard truth: if you don’t know how to test scientifically — or if you do know but you think it’s not necessary, your business is on the slow road towards oblivion.
Here are the sort of things you should be watching…
If you want to develop business mastery, it starts with expertise in direct marketing and sales. And that means establishing the ability to measure the following marketing and sales metrics.
- Statistically valid testing at each stage of the sales process
- Structuring price, term, refund, and premium tests for profit — and what works
- Determining the true lifetime value of every new customer
- Calculating “allowable acquisition costs” (what you can spend to get a customer)
- Measuring responsiveness by advertising source
- Identifying the “doubling date” or “half-life” of a new offer or customer
- When is the right time to purge unproductive prospects and staff
- How do you identify opportunities for multiple streams of revenue within your business (the numbers should tell you)
If you don’t have the ability to measure these areas in your business — or if your key people cannot — consider your business to be in trouble.
That being said, these are the sorts of conversations we love to have with you. We’d love to be a resource, and to help you see the opportunities — and the traps — within your business.
Feel very free to forward this article to a Chicago business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for families and business owners.
A.L. Taylor and Associates, PC