Measure how your business grows

I was recently reminded of a simple “formula” to a good, healthy life. That is, eat, sleep and move.

Dr Michael Mol, a brilliant speaker, shared this at the Cape Chamber of Commerce and Industry’s annual general meeting (AGM).

The first two areas, eat and sleep, were dealt with quickly, and he chose to focus on the third for the bulk of his talk move.

Move is the area of exercise. He pointed out the huge value of exercise in so many ways, and said you should find something that works for you. For me that has been walking.

As part of my goal to stay fit, I complete my daily goal of walking at least 10 000 steps or at least 8km a day. I have an accessory to help measure this and keep on track.

It measures the steps you take; the distance covered; calories used; flights of steps taken and even the amount of hours I have slept.

You might ask, “So?” Well, the theme of this article is around the value of measurement. Successful people, and successful entrepreneurs, have applied this secret in their lives and work consistently.

Here are three management axioms that bear repeating, and applying.

Measure what’s important

I have seen those people who are successful in life and in business constantly measuring.

But not everything; they have carefully selected what they believe to be important. Then they focus on this with laser-like abandon.

What’s important to you? Are you measuring it?

If you can’t measure it, you can’t manage it

I am involved in an exciting project to help incubate a certain amount of businesses.

It is a privilege and a challenge; yet one of the non- negotiables that must be incorporated is demonstrating that these businesses have actually started.

This means they must be properly registered, be tax compliant and have traction. What important factor are you perhaps not measuring (in your life, career or business?)

If you can’t measure it, you can’t improve it

Bob Parsons, the founder of GoDaddy, said it best when he quipped, “Measure everything of significance. Anything that is measured and watched, improves.”

I started measuring my steps in February 1 2015. Initially, I was just making the 10 000 step mark. In March and April of 2015, however, I improved my average steps by 10% to 20%.

Incidentally, I have walked over 8000km since then.

That’s 8046 lifetime kilometres: I’ve walked the entire length of Africa.

Measuring your business by using a business dashboard

A small business dashboard is a series of charts and graphs that show exactly what’s going on in your business.

A modern motor vehicle’s dashboard enables the driver to complete their journey safely, with relatively low stress, while ensuring the vehicle’s long-term sustainability.

A good business dashboard can offer the following benefits:

Identifying key measures that result in a smoother “journey”;

Flagging any areas where discrepancies could have a serious effect upon the business.

Collating information that you can use in real time to adjust to get to your desired location.

I recommend keeping the number of “dials” low when first building your dashboard.

Here are seven you could consider including in your dashboard:

Financial information such as profits, profit margins and cash balance.

Revenue/sales information showing charts such as sales per day and indicators of your top selling products/services.

Website details showing the number of visitors to your website, key Google words, etc.

Advertising to show the effectiveness of your advertising campaigns, such as how many leads or sales each rand spent on advertising is bringing in.

Email marketing showing information such as how many emails you sent out, how many were opened, and how much revenue they generated.

Social media data that show what return you are getting through social media sites.

Customer service records identifying information on responsiveness, complaints and customer feedback.

The benefits of measuring

Imagine what would happen if you had a 10% to 20% improvement in what you measured?

(Think about examples of time taken to respond to client queries; or number of chapters completed in your “book”; or number of sales calls made by the team; or time taken to introduce a new product to market).

By building the healthy habit of constantly measuring your business through a tailor-made dashboard, you could seriously improve profits, sales, new clients gained and old ones retained.

In fact, by paying heed on a daily or weekly basis, you could significantly impact the growth and profitability of your business.

What measure are you absolutely going to require of yourself in the coming new year?

Steve Reid is the manager of the Centre for Entrepreneurship (CFE) at False Bay College. His column appears once a month.

Email comments or questions to steve.reid@falsebay.org.za or visit www.falsebayincubate.co.za for more information about CFE.