It’s not Enough to just Know Your Numbers

Recently I’ve been working with some of our members to dig deep into their numbers; getting into the nitty gritty of the finances, the pricing, the retention rates, client value and spend, and all that good stuff. If you’re not familiar, many of these are often referred to as KPIs, or key performance indicators. And a few of these members have all said the exact same thing…”I know the numbers, I just don’t know what to do with them.” So let’s talk about that for a bit… 

KPIs are crucial. They tell you flat out how healthy your business is. It’s like a checkup at the doctor; heartrate, blood pressure, cholesterol levels, all that good fun stuff. Your business needs a checkup every once in a while. You have to know those numbers so you know what’s really going on on the inside. And just like someone whose cholesterol is through the roof, they may have no symptoms. Everything from the outside may seem just fine. Until a heart attack hits. And if they had taken a look inside sooner and made some lifestyle changes, then they may have been able to prevent that, right? So why do so many people only look on the surface of their business? “Well, I’m making a decent income.” or “I have a pretty consistent clientele” or whatever the case may be. That’s the surface. What’s happening underneath that? That’s where these KPIs, these key performance indicators come in so handy. So you have to know them…you have to get comfortable digging in, collecting the data, and looking at it…because I’ll be honest, sometimes it’s hard to look it. You probably don’t want to see that only half your new clients are returning. You don’t want to see how low your profit margin really is. And all that other stuff. You’re scraping by and that’s enough…or is it? 

But it’s not enough to just know these numbers either. You have to know what to do with them. So only half of your clients are returning, how can you then take that knowledge and turn it into something useful? You set incremental goals and create strategies around each of those numbers. You track and tweak, and analyze, and tweak again, and you keep doing the hard things because they need to be done to actually improve those numbers, which is what improves your business, your income, and your quality of life. Just like a couch potato may not want to start jogging or going to the gym, but if it’s going to mean living a long and healthy life, then most people *hopefully* will push themselves to do that; to suck it up and just do the hard thing. And if you want your business to have a long and successful life, then you need to do the hard things too and make those lifestyle changes too.