How Metrics Can Save Your Business (Part One)
Hey, guess what?! We’re gonna talk about percentages and business metrics and key performance indicators and …
Wait, come baaack … Where you going?!?
I’m serious. I’ll try to make this as painless as possible. 😅
Most people out there don’t want to deal with their business metrics and data. It feels too much like … you know … math. 🤦♀️ And how can you even know which numbers are really important and which ones you can safely ignore? 🤨
What I really, really wish more business owners knew is that you need more than just good ideas, a great product or terrific people skills to be successful.
Here’s the thing: lots of people have that stuff. But one big reason why so many small businesses start up and then fail within the first few years is because we rely too much on emotional decision making and too little on what the numbers are trying to tell us.
Notice that I’m saying “we” – yeah, I’ve been there too.
But before we jump into numbers (Yep, you’re safe for today 😂 – stay tuned for part two!), I really want to give you a couple of foundational principles that completely transformed the way that I think about my business.
Staying true to these core ideas have kept me from getting distracted by rabbit trails and money pits that don’t serve my company or my clients.
1. Reverse engineer your number one priority
Basically, start with your ultimate goal, whatever that is. Improving cash flow, increasing web traffic – whatever. Put that goal at the top of your priority list and rearrange all your other priorities to serve that goal. Cut out expenses, plans and ideas that aren’t working, to get you closer to your objective.
This might sound super obvious, but I think if we’re all being honest here, we can name a time when we got off track chasing some side project or overly caffeinated brainstorm that ended up costing us money instead of making us money. Remember to conserve your mental energy and stay focused on your ultimate goal.
2. Pursue the right clients/customers
I know this may sound counterintuitive, but running after EVERY customer, instead of running after the IDEAL customer is the wrong approach.
Yup, you heard me right.
I know it sounds insane because if you’re the average business owner, you think that you need to hold on to ALL THE CUSTOMERS and do whatever it takes to keep them.
But ultimately, that’s going to drive you crazy and lose you money.
Let me explain … trying to chase down every client is counterproductive because it sucks your time, energy and money away from the ideal clients. While you’re busy trying to get as many customers as possible, the ones who really want to buy your product are going to notice that they aren’t your top priority.
So here’s the critical question: do you actually need more clients or do you need to invest more time and attention on the clients you already have?
Here’s my best advice on this – spending your time, money and sanity on endlessly pursuing more and more clients will ultimately distract you from investing in the clients you have and growing your company. Commit to identifying and serving your ideal clients and be intentional in those relationships.
If you’re interested in digging deeper into this idea, check out The Pumpkin Plan by Mike Michalowicz. I highly recommend it!
What does any of this have to do with that math/numbers/data stuff we talked about earlier?
Everything. No seriously, everything!
How can you know for sure what expenses are killing your bottom line or which clients are worth more of your attention without looking at your numbers?
If the idea of deep diving into this stuff makes you nervous, deep breath …. you’re not alone! Come on back for part two in this series and we’ll walk you through it. You’ve got this! 💪
Oh and while you’re waiting, here’s a quick read on using metrics to analyze your website traffic – check that out right here!