Know your numbers

24th January 2013

As a coach more often than not I need to impress on my clients the need to know their numbers. Sometimes it takes quite a while to get the point across, but in the end when they “get it”, they can always see the value it brings.

Just recently I have had two good examples of clients that have had their eyes opened by spending time in analysing what is going on in their business. The first one had been asked to categorise his customers in terms of how he rated them A-D, but he found that he had rather more in the top category than either of us had expected. However, I pointed out that just because they brought a high income to the business, it didn’t necessarily mean that they were good customers. Especially if in fact with more detailed analysis he found that the time taken to deliver their service to some of their clients was actually meaning that their margins were negligible. So time spent on analysing not only turnover/customer, but also pricing, time delivering the service, ease of dealing with them, and speed of payment, can give you a far more accurate assessment of whether they really are “A” customers, and therefore if you want to keep supplying them or not.

The other example I have, was with a client who finally got around to analysing how his income was split between the different services he offered. Having spent an hour (only) looking at these figures, we quickly had some very interesting and revealing facts at our fingertips. This meant he was able to make good business decisions based on actual numbers, rather than just gut feelings, both in terms of where to put more time and effort, and where he should look to increase prices and income. Again time very well spent.

So remember, even if in all the rush and humdrum of the day to day business, always make time to check and know your numbers. Chances are you are missing something key if you are not doing this, and when you do, I guarantee you will be pleased with what you find out.

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