How to use numbers to increase business growth
With Coach Jeff Earlywine
There are many important aspects to running a successful business today. But one practice, if done consistently, will almost guarantee that you will move ahead of your competition. “What is it,” you ask??
I personally first learned this idea when I was a cocky college kid. I had a professor say to us, “If you go out and read your electric meter every day you will save money on your electric bill.” Well… I thought he was crazy and I was determined to prove him wrong. But what happened shocked me and my roommate. As I read that meter every day, we found ourselves turning off lights and not running the A/C as much. It literally changed our behavior. At the end of the month our electric bill was only $18!!! Are you kidding me??? All because we focused on how much electric we were using every hour of the day.
So… how does this ONE THING get applied to your business? The same way. The answer is so basic it is often dismissed as not important - Review DAILY important and vital information (KPIs) about your business. If you do you will see increases in your bank account and on the income statement’s bottom line.
So what should you monitor on a daily basis? That question could have many different answers depending on your business focus and product mix. But here are a few to start with.
• Daily gross profit on sales
• Number of employee overtime hours daily/weekly
• Number of new customers obtained
• Customer service issues identified and corrected
• Marketing strategies and programs that worked this week, and how they numerically impacted the business
• Inventory management
Want another idea to grow your bottom line?
Now, what if you could make three very small changes and increase your net profit by over 20%? Interested? Sound too good to be true? Well, how about this? What is 1+1+1? Would I upset you if it is not 3? Well it is a lot more than 3. All you have to do to find out the answer is to increase your sales/revenue by 1%, decrease your COGS by 1% and the total of all other expenses by 1%.
To see what I mean all you need to do is: 1. Print out a recent full-year income statement (P&L) for you company and then 2. Download the lesson handout for a free 1+1+1 worksheet. This worksheet will show you how easy it is to grow your net profit by at least 20%.