Improve Your Business Value – Know Your Key Numbers and Track Them

Every business can be improved. For the best results, remember the 80/20 rule. 80 percent of what you work on is not that essential. The other 20 percent is the key. We recommend you determine and work on the 20 percent that will dramatically improve your business.

Every successful business person we have ever worked with has a shorthand business management system that allows them to track the business in real time.

Small business owners often have an old green accounting ruled book where they post these critical numbers. Larger business owners have summary reports straight from the computer or compiled by trusted staff to track the most critical details.

An example of this was done by the owner of a title insurance and settlement shop we know. Weekly he would track the following items; newly opened cases, total backlog, and settled cases by unit and dollar amount. Just based on those few numbers, he knew financially where the business was at all times.

This information allows you to make adjustments as soon as market changes appear instead of months later when the checkbook is finally tied into the historical (meaning already old) accounting data.

Every industry has these critical numbers that provide an effective shorthand way for experienced operators to know what is going on. If you do not know the system used in your industry, ask a friendly competitor how they do it. If they will not tell you, go to a national convention and ask competitors across the country that are not competing head to head with you.